* Bonds rally to fresh highs
* Inflation-linked bond sale at 0900 GMT
JOHANNESBURG, July 20 (Reuters) – Yields on South African
debt extended lows to fresh records on Friday morning, supported
by an interest rate cut in the previous session, while the rand
weakened due to the bleak domestic and global economic outlooks.
The Reserve Bank surprised the market On Thursday by cutting
its repo rate by 50 basis points to 5 percent. It also cut its
growth and inflation forecasts.
The yield on the 2015 bond dropped to a record
5.32 percent, while the 2021 issue fell to 6.425
percent.
The rand was down 0.3 percent to 8.20 at 0650 GMT,
off a 8.1750 close in New York on Thursday.
Analysts say closes above the 8.20 level will signal
convincing rand weakness.
“Yesterday’s monetary accommodation could encourage foreign
bondholders due to the capital appreciation gains they would
have enjoyed as result of yesterday’s rate cut,” Absa Capital
said in a note.
“Especially if they believe that yesterday’s monetary
accommodation is unlikely to be a one-off affair.”
Continued…
