The Treasury borrowed $5bn (roughly R75bn) worth of bonds on international capital markets this week, with $2bn maturing in 2029 (10-year) and $3bn maturing in 2049 (30-year). This is the biggest euro bond the country has issued, which for the Treasury is a show of confidence in SA. I agree in part, but raising funding has never really been an issue; it is the price of that debt that matters.

Those outside financial circles have been talking and mostly bemoaning the Treasury piling on foreign debt when it needs to reduce it. There is some validity in that thinking, but it misunderstands the treasury’s job of managing the fiscus, which includes managing refinancing or funding risk. To reduce debt does not mean a country must not meet its funding requirements in the interim, or that it should not take advantage of better pricing when the market allows.

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