ECONOMY
BRIAN KANTOR: Policy shift would give Ramaphoria legs
It is possible to get very rich from politics in an old-fashioned, honest way. Had you predicted that Cyril Ramaphosa would win the ANC election in December and ascend to the presidency of SA, and had you bought the rand and the shares and bonds that benefit from a strong rand, your gains would have been impressive. The rand-dollar exchange rate reached a recent low of R14.46 on November 15 2017. It is now R11.77, an improvement of about 20%. Since then the rand has also gained 24% against the JPMorgan index of emerging market exchange rates, which indicates that it is SA-specific surprises, rather than global forces, that has driven the rand recently. The cost to the taxpayer of issuing rand-denominated debt has fallen significantly. The annual yield on five-year RSA bonds has fallen from 8.69% on November 15 to 7.38% on March 12 — that is by 1.31 points or the equivalent of a 16% decline in the cost of issuing new government debt of this duration. That is even as US interest rates...
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