The South African rand firmed on Thursday as the government began selling dollar-denominated eurobonds for the first time since 2024 when it raised $3.5 billion.
At 1452 GMT the rand traded at 16.9750 against the dollar, up roughly 0.4% on Wednesday’s close and at its best level in three weeks.
Deutsche Bank announced in a notice on the London Stock Exchange that the initial price guidance is in the 6.625% to 7.750% range for both the 12-year and 30-year bonds.
Johann Els, chief economist at PSG Financial Services, said this was one of the main contributors to the stronger rand, adding that South Africa’s removal from the global financial crime watchdog’s “greylist”, a recent S&P credit rating upgrade and strong commodity prices have also boosted investor confidence.
“It’s a confluence of a number of factors over the last weeks and months that is adding up to the better outlook and investors are realising that there are better returns in emerging market economies,” said Els.
South Africa’s current account deficit narrowed to 0.7% of gross domestic product (GDP) in the third quarter from 1.0% of GDP in the second quarter, central bank data showed earlier on Thursday.
It decreased to 57.0 billion rand ($3.36 billion) in local currency terms, falling less than forecast by Adam Phillips, treasury specialist at Umkhulu Treasury, who projected a deficit of 32 billion rand.
On the Johannesburg Stock Exchange, the Top-40 index (.JTOPI), opens new tab was last down 0.3%.
South Africa’s benchmark 2035 government bond was stronger in early deals, with the yield down 3.5 basis points at 8.315%.
-Reuters