The government can now borrow in the domestic market at the lowest cost in more than five years to fund its yawning budget deficit, thanks in part to the country’s central bank.
Moody’s Investors Service downgraded the credit to junk in March, triggering the country’s exclusion from the FTSE World Government Bond Index, tracked by more than $3-trillion of funds. Non-residents’ share of local debt dropped to 32.6% at the end of April, from 37.3% in January, according to National Treasury data. Among the most voracious buyers in that period have been SA lenders, who increased their holdings to 20.1%, the most on record, from 16.7% in December.
Reserve Bank governor Lesetja Kganyago said earlier in May that policymakers have room to give the economy more support, after they slashed the repo rate by 200 basis points since March.
Not the best English.
BuddyWells1
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