During June the repo rate was cut by 1%, resulting in the prime overdraft rate dropping to 13.75%. Yields on money market instruments subsequently fell by a similar margin.

The cash market remained tight during May despite very favorable economic information. Core inflation declined to 7.7%, while first quarter economic growth slaved to a seasonally adjusted 2% quarter on quarter. The trade account shows a very healthy surplus year to date, while the successful bid for De Beers by Anglos will cause a large capital inflow. In the money market the yields on larger dated NCDs declined by 20 basis points. In contrast, call rates moved higher. The funds duration was extended from 58 days to 90 days.