Mmegi: "We expected the fall in yields and we knew we would take follow-up steps to stabilise the yield," he said in response to BusinessWeek questions.
"Under the reverse repurchase agreement, banks that have liquidity after the auction come back and we are able to give them BOBCs for that. By doing so, we therefore support the lower part of the range of yields."
He decried the over-reliance on BOBC interest income by banks. "We have said the BOBCs should never have been seen as an investment and this (deposit rate slide) is emblematic of that position," he said.
"They see this as an investment instrument where they can put money and pay for the interest on deposits. The problem is that to the extent that this instrument was set up for a particular purpose, it can be changed.
"In November, we said our decision was meant to encourage banks to look for other opportunities to earn good rates on investment opportunities and pay deposit interest rates. It therefore must not follow that they have to slash deposit rates."
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