Bonds unmoved by Reserve Bank’s dovish statement, despite stronger rand
South African bonds were little changed on Thursday afternoon, despite a slightly firmer rand, showing little initial reaction to the Reserve Bank’s revised forward guidance on interest rates. Reserve Bank governor Lesetja Kganyago adjusted SA’s growth outlook for 2018 slightly upwards, to 1.4%, from 1.2%, but kept the repo rate unchanged at 6.75%, citing risks to the rand. These risks included political developments and global monetary policy tightening. Despite a global environment supportive of local bonds, the local debt market also faced the prospect of significant losses resulting from any further credit-ratings downgrades, Kganyago said.
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