Bank rate was reduced from 17 to 16 per cent on 20 October 1997, and the money market shortage allowed to decline from R11.1 billion at the end of November 1997 to R7.6 billion at the end of January 1998 (and R7.2 billion last Friday). The more flexible interest rates in the money and capital markets drifted downwards.
The monthly average yield on long-term government bonds declined from 14.5 per cent in November 1997 to 13.6 per cent in January 1998, and to 13.3 per cent at the end of last week.