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SAGB Yields Dip as Plan Unveiled to Tap Reserves for Debt

SOUTH AFRICA
  • Of the ZAR 250bln tapped from the SARB’s reserves, ZAR 150bln will be used to settle liabilities and the other ZAR 100bln will go to a central bank account which will ease funding pressures in capital markets.
  • As a result, yields on have SAGBs dipped, and currently deal 7-10bps lower across the curve. 10y yields reach new weekly lows of 11.593% and are close to reversing the entirety of the Feb 12 upleg.
  • According to Bloomberg, the Gold and Foreign Exchange Contingency Reserve Account, which is managed by the central bank on behalf of the Treasury, holds about ZAR 500bln ($26.6 billion) in unrealized profits incurred through changes in the value of the rand.

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