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State to save R2bn in interest

Posted On Thursday, 07 February 2002 03:01 Published by
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IN THE run-up to Finance Minister Trevor Manuel's budget speech later this month, government unveiled more evidence this week of its prudent management of its finances,
IN THE run-up to Finance Minister Trevor Manuel's budget speech later this month, government unveiled more evidence this week of its prudent management of its finances, revealing that it paid back more debt than initially expected.

National treasury data show that SA will save R2bn in interest payments after exceeding its budgeted repayment of existing debt by more than R11bn.

It had budgeted to pay R6,1bn over the current fiscal year, but instead paid back R17,3bn in debt, R4,97bn of which was short-term and R12,23bn was for long-term obligations.

The repayment will see the bond market shrink by 3% to R327bn, further constraining the supply of debt in the local market for investors.

Brait bonds analyst Tim Marsland said that government tax and loan data are also looking positive, with government's cash pile at R15,2bn by the end of January.

Marsland says this should cover the upcoming bond coupon payments, which are usually ploughed back into the market, and should help yields lower.

Publisher: Business Day
Source: Capital Markets Reporter
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