National Treasury has announced a further reduction in the quantum of nominal bond auctions following the publication of March 21 exchequer data. This follows the announcement by SARS at the end of March 2021 that gross revenue receipts exceeded forecasts by R38bn, which raised the year-end cash balance. The decision to reduce bond issuance instead of running with a higher cash balance shows the focus is on dealing with the rising debt burden and containing expenditure (as set out in the February 2021 Budget Review).  Public sector wage talks are deadlocked. Public sector trade unions have opened the floor with an increase of CPI + 4% and a host of other salary perks and benefits. The government has offered R9.4bn, which covers the cost of living expenses.

Auction size:

Fixed bonds: April - reduced from R6.6bn to R4.8bn per week. May - R4.8bn to R3.9bn (-R0.9bn)

ILB bonds: April – reduced from R2.0bn to R1.2bn. May - unchanged