At a meeting yesterday between the Reserve Bank and chief executives of the four major banks, the current situation in the financial markets was reviewed. Indications of more stable conditions in these markets, and particularly in the South African market for foreign exchange, were welcomed. The hope was shared that the improvement during the past two days signalled a change in the tide, and that easier conditions may soon make it possible for interest rates to resume the interrupted downward trend of the first four months of this year.In light of these discussions, the Reserve Bank has decided to take a first cautious step already today and to reduce the rate for its one-day repurchase transactions (the repo rate) from 18 to 17½ per cent. Full details of today's tender for repurchase transactions will be supplied in the normal way on the Reserve Bank's Reuter screen RBMQ, at about 12:00 noon.