{"id":43081,"date":"2023-01-19T18:48:19","date_gmt":"2023-01-19T18:48:19","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/sa-may-need-weaker-rand-higher-rates-to-plug-deficit-2"},"modified":"2023-01-19T20:21:14","modified_gmt":"2023-01-19T20:21:14","slug":"sa-may-need-weaker-rand-higher-rates-to-plug-deficit-2","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/sa-may-need-weaker-rand-higher-rates-to-plug-deficit-2","title":{"rendered":"SA may need weaker rand, higher rates to plug deficit"},"content":{"rendered":"<p><span style=\"color: #ff6600\"><strong>Africa-Press &#8211; South-Africa. <\/strong><\/span>South Africa\u2019s first current-account deficit in years may need to be plugged by foreign investors, who will likely demand a weaker rand and higher yields before they return to the local debt market.<\/p>\n<p>While non-residents have offloaded South African government bonds worth R60.6 billion on a net basis over the past three years, current-account surpluses had tempered the need for portfolio inflows.<\/p>\n<p>That\u2019s now changing, and luring foreign investors back is likely to come at a price. &#8220;The country normally needs to attract sufficient capital inflows to maintain a balance of payments equilibrium,&#8221; said Mike<\/p>\n<p>Keenan, a fixed-income strategist at Absa Group in Johannesburg. &#8220;Now that the current account is widely expected to move back into deficit territory,<\/p>\n<p>South Africa may need to entice foreigners to return via a weaker rand and\/or higher bond yields.&#8221; South Africa posted a current-account shortfall for a second<\/p>\n<p>straight quarter in the three months to September. Analysts still expect the country to have run a tiny surplus for the full year 2022, but to swing to<\/p>\n<p>deficits of 1.2% this year and 1.8% in 2024, according to estimates compiled by Bloomberg. Outflows from the local bond market gathered pace in 2020 after Moody\u2019s Investors Service followed S&amp;P Global and Fitch Ratings in<\/p>\n<p>cutting South Africa\u2019s credit rating to junk, leading to the removal of the country\u2019s debt from global indexes tracking investment-grade bonds. Non-residents\u2019 share of government debt dropped last month<\/p>\n<p>to 26%, the lowest since May 2011, from a high of 43% in 2018. The selloff has helped push yields higher, with the rate on 10-year rand bonds at 10.3%, almost 80 basis points above the five-year average<\/p>\n<p>and among the highest in emerging markets. That may already be an attractive level for some foreign investors as central banks around the globe moderate the<\/p>\n<p>pace of monetary tightening. &#8220;Now that the narrative has turned somewhat dovish, we\u2019ve seen renewed interest for interest-rate products from offshore investors,&#8221;<\/p>\n<p>said Michelle Wohlberg, a fixed-income analyst at Firstrand Bank Ltd. in Johannesburg. &#8220;But there are still a lot of moving parts driving sentiment and investment decisions.&#8221;<\/p>\n<p><strong>For More News And Analysis About <a href=\"https:\/\/www.africa-press.net\/south-africa\">South-Africa<\/a> Follow <a href=\"https:\/\/www.africa-press.net\/\">Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Africa-Press &#8211; South-Africa. South Africa\u2019s first current-account deficit in years may need to be plugged by foreign investors, who will likely demand a weaker rand and higher yields before they return to the local debt market. While non-residents have offloaded South African government bonds worth R60.6 billion on a net basis over the past three [&hellip;]<\/p>\n","protected":false},"author":84,"featured_media":43080,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,4377,251,1187,275],"class_list":["post-43081","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-current-account-deficit","tag-economy","tag-rand","tag-south-africa-2"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.1 (Yoast SEO v27.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>SA may need weaker rand, higher rates to plug deficit - South Africa<\/title>\n<meta name=\"description\" content=\"South Africa\u2019s first current-account deficit in years may need to be plugged by foreign investors, who will likely deman ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/sa-may-need-weaker-rand-higher-rates-to-plug-deficit-2\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SA may need weaker rand, higher rates to plug deficit\" \/>\n<meta property=\"og:description\" content=\"South Africa\u2019s first current-account deficit in years may need to be plugged by foreign investors, who will likely deman ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/sa-may-need-weaker-rand-higher-rates-to-plug-deficit-2\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-01-19T18:48:19+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-01-19T20:21:14+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/01\/postQueueImg_1674141507.85-63c9a5e10442e.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"684\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/sa-may-need-weaker-rand-higher-rates-to-plug-deficit-2#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/sa-may-need-weaker-rand-higher-rates-to-plug-deficit-2\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"SA may need weaker rand, higher rates to plug deficit\",\"datePublished\":\"2023-01-19T18:48:19+00:00\",\"dateModified\":\"2023-01-19T20:21:14+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/sa-may-need-weaker-rand-higher-rates-to-plug-deficit-2\"},\"wordCount\":369,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/sa-may-need-weaker-rand-higher-rates-to-plug-deficit-2#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/01\/postQueueImg_1674141507.85-63c9a5e10442e.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"current account deficit\",\"Economy\",\"rand\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/sa-may-need-weaker-rand-higher-rates-to-plug-deficit-2#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/sa-may-need-weaker-rand-higher-rates-to-plug-deficit-2\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/sa-may-need-weaker-rand-higher-rates-to-plug-deficit-2\",\"name\":\"SA may need weaker rand, higher rates to plug deficit - 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