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South African bonds rally on new bond buyback programme

South African bonds rallied on Wednesday, 22 October 2026, after the government unveiled plans to cut weekly fixed-rate bond auctions and launch a bond buyback programme, while the rand was little changed following the announcement of two months of fuel-price relief.

By Sfundo Parakozov and Nilutpal Timsina

22 Oct 2026

Source: Reuters.

The benchmark 2035 government bond rallied strongly, with its yield falling 14.5 basis points to 8.59%, while the rand was steady at 16.3775 per dollar at 1350 GMT.

The National Treasury said it would reduce the amount of fixed-rate bonds it sells every week and launch a bond buyback programme, part of efforts to show fiscal discipline and bring down debt levels.

"The reduced supply, together with the new buyback programme, probably helps explain the positive bond-market reaction," said Bureau for Economic Research chief economist, Lisette IJssel de Schepper.

Finance Minister Enoch Godongwana announced two months of additional fuel-price relief in a mid-year budget speech, saying it would cost R10bn ($608.99m) in forgone revenue.

South Africa imports most of its fuel, making it exposed to swings in global energy prices.

South Africa's inflation and retail sales rose 4.5% and 3.3% year-on-year, respectively, the statistics agency said on Wednesday, 22 October 2026.

Johann Els of PSG Financial Services said the central bank's rate hikes in May and September should be sufficient for now, though the sharp increase in fuel prices in October poses a risk of broader inflationary spillovers..

Source: Reuters

Reuters, the news and media division of Thomson Reuters, is the world's largest multimedia news provider, reaching billions of people worldwide every day.

Go to: https://www.reuters.com/