South Africa is maintaining its non-investment / speculative grading status from the major credit rating agencies. During 2023, further downgrades may be possible in view of the Eskom and other infrastructure crises, the ANC government’s political support of Russia’s Putin, low structural growth, continued government corruption allegations and South Africa’s “Grey List” status from the FATF. Long-dated bond maturities averaged some 11.5% during April/May 2023, while short-dated maturities averaged 8.5%. With inflation appearing to relent and higher money market rates, bond yields may pull back slightly, although the high state debt and low growth will limit any material yield declines.
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