For instance, we relied quite heavily on FX swaps, which contributed to high and volatile rates in the forward market, likely hampering investment by non-residents.4 The volumes of public sector funds we took into the SARB cost around 30 basis points over repo.5 In addition, we were concerned that our toolkit could fail if the supply of bank reserves increased further, in which case the shortage might have disappeared.
Consistent with this view, our survey indicates that the average firm that used community banks exclusively was smaller in terms of number of employees, sales, and assets than the average firm that used large institutions exclusively or that used both community banks and large banks.