South African bonds were stable on Tuesday morning as local market focus is squarely on the medium-term budget policy statement on Wednesday. Bonds have been stable in previous sessions despite a relatively volatile rand, which has been on a weakening trend. At 9.04am the benchmark R186 government bond was bid at 8.84% from 8.83% on Monday. The rand was at R13.7310 to the dollar from R13.7043. Rand Merchant Bank analyst Gordon Kerr said bond yields were in "the worst position" because they were too high for any investors to see value in selling or looking to pick up any large positions in them, particularly with the upcoming midterm budget. "This leaves yields to track the rand, which has come under pressure along with other emerging-market currencies."
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