South Africa’s reliance on deep local markets to finance most government borrowing is no longer a given. Domestic investors are demanding ever-higher yields as foreigners pull back from the market, just as the National Treasury gears up to refinance almost R1-trillion of debt over the next three years. That’s raised alarm bells at the South African Reserve Bank, which warned last month that the growing reluctance from domestic investors to continue absorbing government issuance could drive borrowing costs even higher.
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