Bond market flourishes while rand languishes

Posted by BDLive on 12 June 2014

By Robert Brand
INVESTORS are buying South African bonds at the fastest pace in the year to date and are using swap markets to limit the risk of a weaker rand as ratings companies prepare to rule on the nation's creditworthiness.

Cross-currency basis swaps, used by traders to exchange cash flows in rand for cash flows in dollars, climbed as much as five basis points on Tuesday to 42, the highest level in a month and the most among 18 developed and emerging markets that are tracked by Bloomberg.

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