Economic Research Note: A Financial Conditions Index for South Africa

With the repo and prime overdraft rates having risen by 350 basis points since June 2006, financial conditions are generally considered to be tighter now than they were a year ago. However, looking at a wider measure of financial conditions, we have found that financial conditions in general do not appear to have become much tighter, and that interest rate increases have thus far had a fairly limited impact on broadly measured financial conditions.

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