Since Finance Minister Pravin Gordhan presented his February budget, his team at the Treasury has sold $4.25bn of dollar bonds on international markets. That’s about R60bn in rand terms, more than a third of the total of R170bn borrowing that the government raised on local and foreign markets in 2015. It is a record for foreign bond issuance in any one year, with $1.25bn raised in April and $3bn in September. The timing and the pricing of the issues demonstrates the Treasury’s agile management of government debt, which is one of the many reasons the institution’s strength and independence need to be safeguarded. The Treasury took advantage in September of the tide of money that has been washing into emerging market debt lately as investors chase yield. Those investors may become more jittery ahead of a likely hike in interest rates by the US Federal Reserve in December and their appetite for emerging market risk may diminish. Their appetite for South African-specific risk could dimi...
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