The Bank of Canada is reducing the frequency of provincial bond purchases, saying credit markets need less support than when the program began last May.

The central bank will hold one reverse auction per week for provincial bonds instead of two, a representative for the Ottawa-based institution said in a reply to questions from Bloomberg.

“Provincial markets are functioning well and as a result tenders are being reduced to only one a week,” which will be on Thursdays, bank spokesperson Rebecca Spence said by email. “This is consistent with the gradual reduction approach for other programs that were introduced by the Bank to support market functioning as these markets improved.”

The bank is making the move at a time when most provinces have completed their funding plans for the current fiscal year, which ends March 31.

On Monday, all-in yields of provincial bonds maturing between one and 10 years reached the highest level since last April, according to Bloomberg Barclays indexes, as investors bet on a global economic recovery on the back of a COVID-19 vaccine rollout.

Benchmark yields in Canada have shot up this year alongside a broader selloff in sovereign debt. The 10-year Canada yield sat at 1.24 per cent Tuesday, up from 0.677 per cent at the start of the year. Ten-year yields for some provinces have spiked to around the 2 per cent mark.

Bank of Canada announced a plan to purchase as much as $50 billion of provincial bonds early last year as part of a number of measures meant to restore liquidity to the country’s financial markets after the COVID-19 pandemic caused risk premiums to widen to record levels. As of last week, the central bank held $17.4 billion of provincial bonds. The program is set to expire in early May.