South African bonds were slightly weaker on Tuesday morning, tracking the rand. The rand, which bonds usually track, weakened sharply on Monday on concern expressed by ratings agency Moody’s about SA’s growth and the Reserve Bank’s independence. The agency said while it supported the Bank’s recent surprise interest rate cut — the Bank cut the repo rate from 7% to 6.75% last week — without decisive structural reforms, longer-term potential growth and the fiscal outlook would remain subdued and continue to be a source of credit pressure. Moody’s said the rate cut coincided with political pressure on the Bank’s independence and mandate after Public Protector Busisiwe Mkhwebane called for a constitutional change to its mandate to focus on growth. "It also sends another unclear signal about policy direction at a time of very low and falling business confidence, and coincides with governance issues at state-owned enterprises." Rand Merchank Bank analyst Ilke van Zyl said should Moody’s do...
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