The South African central bank reduced its government bond purchases to 5 billion rand ($292.64 million) in June, half the monthly average, bringing its bond holdings to 35.9 billion rand, data showed on Tuesday.

The Reserve Bank began a series of emergency liquidity measures in late March to ease the stress on banks and capital markets caused by the coronavirus pandemic. Among them were extra repo auctions and 275 basis points worth of lending rate cuts.

The bank has since slowed those support measures as local financial markets recovered, resisting calls from labour and some economists to resort to full-blown quantitative-easing-style funding of government’s gaping budget deficit.

The bank’s June statement of assets and liabilities showed its accommodation to commercial banks via repurchase, or repo agreements, had fallen to 60 billion rand in June from 73.5 billion in the previous month.

In May, the central bank reduced overnight repo auctions to one per day from the two it implemented to pump liquidity to commercial banks.

Bond yields have returned to near pre-COVID-19 levels and the rand has recovered from record lows, although that recovery remains fragile with the economy contracting for the consecutive time in the first quarter.

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