In line with the prevailing expectations of no change in the one week repo rate, at 8.25%, the CBT kept the poliy rate flat. By channelling liquidity via a variety of its instruments, the CBT has been increasing the effective cost of funding to local banks from 7.5% in July to above 9.37% as of yesterday. In the meeting, despite some expectations of a widening in the policy corridor from its current 6.75% (lower band)-9.75% (upper band) range, the CBT also left all other rates (including the 11.25% late liquidity window rate) unchanged and instead vowed to continue with liquidity measures. The decision implies that ... (full story)