JOHANNESBURG, July 11 (Reuters) – South African government
bond yields hit record lows on Wednesday on strong foreign
demand ahead of the country’s inclusion in Citi’s World
Government Bond Index on Oct. 1, while the rand weakened a touch
on the day.
Foreign demand for South African debt shows little sign of
waning before the Citi move, dealers said.
The market is also pricing in an interest rate cut at next
week’s meeting of the central bank’s Monetary Policy Committee.
“The potential for lower rates is still there,” said Ashley
Dickinson, head of the bond desk at Renaissance Capital. “We
could be lower to sideways for an extended period of time.”
The yield on the 2015 and 2021 bonds hit
fresh lows of 5.865 and 7.045 percent respectively early in the
day, before moving back to 5.880 percent and 7.060 percent by
late afternoon.
The rand eased by 0.3 percent to 8.2475 at 1543 GMT from its
close of 8.22 in New York on Tuesday.
South African power utility Eskom sold 250 million
rand ($30.49 million) of its 2033 bond at a clearing yield of
8.94 percent on Wednesday, compared to a yield of 9.19 percent
last week.
The government said it would offer a total of 2.1 billion
rand of its 2023, 2036 and 2048
bonds next Tuesday.
(Reporting by Tosin Sulaiman; Editing by Hugh Lawson)
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