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

South Africa's 10-year government bond yield recently decreased to approximately 8.72%, marking its lowest point since June 2021. This decline follows the government's official decision to reduce the nation's inflation target to 3%, aligned with persistent recommendations from the central bank. During the mid-year budget review presentation, Finance Minister Enoch Godongwana stated that this new target would include a tolerance band of one percentage point on either side to account for economic variations. The primary aim is to enhance inflation control and boost national competitiveness. The South African Reserve Bank has been advocating for a more defined inflation target, suggesting that the previous range of 3–6% was excessively broad, thereby hindering the country's competitive edge. Concurrently, the government has indicated an improved fiscal outlook, although it anticipates a slight reduction in economic growth for this year, with debt levels expected to peak at a higher rate.