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S.Africa approves liquidity facility for banks

A man counts his cash in South Africa, June 15, 2010. REUTERS/Michael Buholzer

JOHANNESBURG

(Reuters) – South Africa’s Reserve Bank has approved the provision of a committed liquidity facility

from which lenders in the country can draw from to meet Basel III liquidity coverage ratio

requirements, it said on Tuesday.

Tests

on seven banks had exposed shortfalls in meeting liquidity ratios because of South Africa’s dependence

on wholesale, short-term funding, central bank said in a statement.

Banks that expect to make

use of the facility, which will be in place at the start of 2013, will be required to pay a commitment

fee, even if they do not draw from it.

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