TUESDAY, 11.00AM
RESERVE Bank governor Dr Chris Stals said on Monday he is happy with the easier liquidity conditions in the money market and will refrain from acting to put the squeeze on banks.
Stals said: “WE have allowed the money market to become more comfortable as part of a gradual easing of monetary policy. The result has been that interest rates in the market have fallen.” He added that the Bank will not act to increase the money market shortage.
In the past fortnight, the shortage has fallen more than R2-billion, from R6,5-billion at the end of last month to R4,2-billion. The money market shortage is the amount of cash commercial banks need to borrow from the central bank in order to balance their books on a daily basis. The size of the shortage has a direct effect on interest rates across the board.