FX.co ★ South Africa 10-Year Bond Yield at 2021-Lows

South Africa's 10-year government bond yield has fallen to approximately 8.60%, marking its lowest point since February 2021. This decrease follows S&P Global's upgrade of the country's credit rating—the first improvement since 2005—as a result of a credible and optimistic medium-term budget review. Furthermore, the Treasury's support for a new 3% inflation target, designed to stabilize prices at lower levels, enhances the credibility of monetary policy and sets the stage for a reduction in interest rates. Market expectations suggest that the South African Reserve Bank might implement a 25-basis-point rate cut on November 20, depending on the October inflation figures, which are scheduled for release a day earlier. Investor confidence has grown significantly recently, driving a surge in South African assets. This boost is attributed to progress in fiscal consolidation, continued governmental stability, and structural advancements such as improved electricity reliability and greater infrastructure investment.