The Bank of England announced on Tuesday a temporary additional liquidity arrangement to banks in the run-up to Brexit as part of the contingency plan to prepare for Brexit.

The bank said in a statement that it will increase the frequency of existing market-wide sterling operations, Indexed Long-Term Repos, lending to banks on a weekly rather than monthly basis, during the March and April period.

The bank has taken the precautionary move as the outcome of Brexit has not crystallized with only a few weeks away from the default Brexit day on March 29.

"We are not seeing any liquidity stresses in the market," bank governor Mark Carney told lawmakers on the parliament's Treasury Committee, adding that the bank's liquidity program change is "part of normal contingency planning."

The bank said it will continue to monitor market conditions carefully and keep its operations, including their frequency, under review. It took a similar approach ahead of, and following, the EU referendum in 2016.

Carney maintained the response of monetary policy to Brexit would not be automatic and interest rate could be in either direction.

On the same day, British Prime Minister Theresa May promised that the members of parliament would be offered a vote on whether they support a no-deal Brexit if her deal is rejected in a meaningful vote in mid-March. If the parliament rejects the no-deal option, another vote will be held on whether to delay Brexit. 

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