Sarb looks to rein in money market liquidity

sarb-inside

The South African Reserve Bank (Sarb) is looking to shore up its monetary policy transmission mechanism by gradually increasing the dependency of the banking sector on central bank money.

While the mechanism is still working, as bank's balance sheets have increased they have become less reliant on the central bank to refinance their liquidity requirements.

The Sarb fears this threatens to undermine the central bank's monetary policy, and break the link between its repurchase (repo) rate and the

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