RESERVE BANK LOWERS RATES

THE Reserve Bank said on Tuesday that it will lower its punitive marginal lending facility rate to 15 percentage points above the daily repo rate from a 20 percentage point spread previously. Reserve Bank officials were not immediately available for comment on the move, but the reduction in the rate follows a rapid improvement in liquidity in the local money market in recent months. The marginal facility lending rate (MLF) is a punitive rate which floats above the repo rate and is used to accommodate banks who have not been able to meet their liquidity needs at the daily repo tender or in the interbank market.