Having not had any difficulties previously, since December 2009 the Bank began to encounter some challenges in conducting its open-market operations in order to manage overall liquidity. In the process, the money market shortage at times declined to quite low levels.
This was mainly due to dwindling demand for SARB debentures, owing to a slowdown in the growth of banks’ balance sheets, which resulted in lower demand for liquid assets that banks have to hold for prudential purposes.