SOUTH African bonds were stable late on Wednesday after trading slightly weaker in intraday trade due to worse than expected February inflation data.
Inflation’s sharp acceleration to 7% year on year in February, from 6.2% in January, supports the Reserve Bank’s decision to raise interest rates both in January and this month. The 7% increase in the consumer price index (CPI) was the highest rate since May 2009.
At 3.54pm, the benchmark R186 bond was bid at 9.310% and offered at 9.290% from Tuesday’s close of 9.310%.
The middle-dated R207 was bid at 8.790% and offered at 8.785% from a previous close of 8.800%.
Rand Merchant Bank fixed income strategist Carmen Nel said the jump in inflation was substantial and it reinforced the Reserve Bank’s hawkish stance on inflation, given the risk from rapidly rising food prices to second-round effects.
Picture: BUSINESS DAY
SOUTH African bonds were stable late on Wednesday after trading slightly weaker in intraday trade due to worse than expected February inflation data.
Inflation’s sharp acceleration to 7% year on year in February, from 6.2% in January, supports the Reserve Bank’s decision to raise interest rates both in January and this month. The 7% increase in the consumer price index (CPI) was the highest rate since May 2009.
At 3.54pm, the benchmark R186 bond was bid at 9.310% and offered at 9.290% from Tuesday’s close of 9.310%.
The middle-dated R207 was bid at 8.790% and offered at 8.785% from a previous close of 8.800%.
Rand Merchant Bank fixed income strategist Carmen Nel said the jump in inflation was substantial and it reinforced the Reserve Bank’s hawkish stance on inflation, given the risk from rapidly rising food prices to second-round effects.
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