Hilary Joffe Columnist

A couple of publications have highlighted the extent to which the taps have been turned off on a source of foreign cash that SA had increasingly relied on over the past decade - foreign investment in the growing stock of bonds the government has issued on the domestic market. SA has more than doubled its national debt since the financial crisis, mostly to finance rising current expenditure on public sector pay, and foreign bond market investors supplied a big chunk of the funding for this. Whereas many other emerging markets, including many of our African neighbours, have gone to international markets in recent years to raise hard-currency dollar or euro debt, SA's government has continued to do 90% of its borrowing on the local market, in rands. But foreign investors bought much of this rand-denominated, local currency debt over the past decade, helping to finance the government's growing debt burden and to plug the gap in SA's balance of payments. That has meant, as the Reserve Ba...

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