South Africa's debt service costs higher than projected - Treasury
South Africa’s debt service costs stood at 907.9 million rand ($58 million) at the end of March, higher than previously projected, Treasury Director-General Lungisa Fuzile said on Tuesday.
“The main reasons for the over payment are higher interest on bonds than expected ... (and) higher interest on Treasury bills,” Fuzile said in a presentation to parliament’s finance committee.
Bonds maintain weaker trend
The South African bond market maintained its weakening path on Tuesday morning‚ even as the rand recovered from its recent losses.
The government bond auction later on Tuesday morning will guide the market direction ahead of the crucial consumer inflation figures on Wednesday.
The Treasury will sell R2035(R800m)‚ R214 (R700m) and the ultra-long-dated R2048(R850m).
“It is interesting that Treasury decided to continue with the R2048 this morning as it was somewhat under pressure in last week’s auction‚” Rand Merchant Bank analyst Deon Kohlmeyer said.
At 8.24am‚ the benchmark R186 bond was bid at 9.350% and offered at 9.330% from Tuesday’s 9.315%.
The middle-dated R207 was bid at 8.720% and offered at 8.710% from 8.690%.
The rand was trading at R15.5398 to the dollar from R15.6656 previously.
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