South African bonds advanced after third-quarter economic growth fell short of economists’ estimates, fueling speculation borrowing costs will be kept at a four-decade low. The rand strengthened.
Gross domestic product rose an annualized 0.7 percent, compared with a revised 3.2 percent in the three months through June, Statistics South Africa said in a report released in Johannesburg today. The median estimate of 19 economists in a Bloomberg survey was 1 percent. The central bank left its key rate unchanged on Nov. 21, though Governor Gill Marcus said policy makers considered an increase on inflation concerns.
“We continue to expect no interest-rate hikes this year or next,” Annabel Bishop, an economist with Investec Ltd. in Johannesburg, said in e-mailed comments. “The Reserve Bank is currently overly hawkish in its communications given the marked weakness of economic growth.”
Yields on government bonds due February 2023 slid three basis points, or 0.03 percentage point, to 7.87 percent by 12:52 p.m. in Johannesburg. The rand appreciated 0.2 percent to 10.0815 per dollar.
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