THE government has demonetised R500 and R1,000 currency notes and has restricted ATM withdrawals to R2,000 per day until November 18 and withdrawals from bank accounts to R10,000 a day and R 20,000 a week till November 24. This move will reduce households’ allocation towards physical assets like gold and property and give a push to financial savings, which is around 7.7% of GDP as compared with 13% for physical savings.
Analysts expect higher current account savings account (CASA) of banks as more money flows through the banking channel. Improved liquidity will drive up demand for bonds and put downward pressure on yields.
