South African bonds were marginally firmer on Thursday afternoon following the Reserve Bank’s unexpected decision to reduce the repo rate by 25 basis points. While most economists have been expecting the bank to move towards a cut, it was not expected to come quite so soon. The Bank cut the repo rate to 6.75% from 7%. "With inflation firmly under control, the Reserve Bank showed courage by breaking out of its paradigm of being fearful of lowering interest rates," said union UASA spokesperson Andre Venter. At 4.17pm, the R186 was bid at 8.61% from 8.645% and the R207 was at 7.49% from 7.51%. The rand was at R13.0515 to the dollar from R12.9174. The euro was at $1.1577 to the euro from $1.1515. Global bond yields were mixed in response to the European Central Bank’s (ECB’s) continued dovish stance. US bond yields fell, but UK gilt yields rose. The ECB kept interest rates unchanged, as expected, but the market continues to believe the ECB will start tapering its stimulus later in the y...
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