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Thuto Shomang, South African National Treasury
07 January 2013
Thuto Shomang, head of the South African National Treasury’s asset and liability management division, talks to Luke Clancy about the treasury’s debt management plans
South African National Treasury
What are the implications of the European sovereign debt crisis for Africa?
Major central banks continue to purchase sovereign debt thus injecting liquidity into the market. These actions are intended to lower bond yields in the developed countries. As a result of lower bond yields, investors need to find higher yields hence the capital inflows into emerging markets and other countries. South Africa has benefited from foreign investors buying local currency debt.
However, the data we have shows that the impact of the European sovereign debt crisis on Africa has been minimal. Africa exports mainly commodities and China tends to attract a lot of these commodity exports. Probably the slowdown in China will impact Africa more.
In South Africa, our primary source of funding is the domestic capital market and about 90% of our sovereign debt is in rand. Foreign investors actively participate in the domestic market and also buy...
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