South Africa 10-Year Bond Yield Hovers at 1-Month Low
South Africa’s 10-year government bond yield was around 8.90%, near one-month lows, as investors continued to seek attractive returns and grew optimistic over the country’s fiscal outlook. Finance Minister Enoch Godongwana will deliver the mid-term budget update on 21 October, amid expectations that stronger revenue collection will help narrow the budget deficit and stabilise government debt. Godongwana is also expected to lay out more details for a fiscal framework to ensure long-term budget discipline that keeps the ratio of government debt as a percentage of gross domestic product under control. The challenges include elevated domestic fuel costs, weak growth and the prospect of higher spending ahead of November local government elections. The South African Reserve Bank raised its policy rate by 25 bps to 7.25% in September in an effort to contain inflationary pressures and prevent inflation from moving further away from its 3% target.
South Africa’s 10-year government bond yield was around 8.90%, near one-month lows, as investors continued to seek attractive returns and grew optimistic over the country’s fiscal outlook. Finance Minister Enoch Godongwana will deliver the mid-term budget update on 21 October, amid expectations that stronger revenue collection will help narrow the budget deficit and stabilise government debt. Godongwana is also expected to lay out more details for a fiscal framework to ensure long-term budget discipline that keeps the ratio of government debt as a percentage of gross domestic product under control.
The challenges include elevated domestic fuel costs, weak growth and the prospect of higher spending ahead of November local government elections. The South African Reserve Bank raised its policy rate by 25 bps to 7.25% in September in an effort to contain inflationary pressures and prevent inflation from moving further away from its 3% target.