South Africa has not been immune to the global bond sell-off, but yields on local currency government debt remain low by post-pandemic standards, and we believe improving fiscal fundamentals and SARB rate cuts will pull the 10-year yield towards 8% by 2028 (from ~9% now). Elsewhere, Zambia delivered a jumbo 250bp cut to 10.75%, but rising fuel prices and a strong El Niño risk pushing inflation above target next year, which will put the brake on further easing.
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