South African bonds were little changed on Thursday afternoon‚ despite a slightly firmer rand‚ showing little initial reaction to the Reserve Bank’s revised forward guidance on interest rates.

Reserve Bank governor Lesetja Kganyago adjusted SA’s growth outlook for 2018 slightly upwards‚ to 1.4%‚ from 1.2%‚ but kept the repo rate unchanged at 6.75%‚ citing risks to the rand.

These risks included political developments and global monetary policy tightening. Despite a global environment supportive of local bonds‚ the local debt market also faced the prospect of significant losses resulting from any further credit-ratings downgrades‚ Kganyago said.

The forward guidance of three 25 basis-points increases by the end of 2019 remained‚ “but the third increase is now a marginal call. The risks to the inflation forecast are still expected to be to the upside‚ although the degree to the upside has subsided”.

At 3.30pm the R186 was bid at 8.48% from 8.46% and the R207 at an unchanged 7.115%.

The rand was at R12.239 to the dollar from R12.2929. It was at R12.2713 shortly before Kganyago’s speech began.

US 10-year treasuries were at 2.6075% from 2.5862%.