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South Africa Yields Fall as Rand Gains After Retail Sales Slow

South African bond yields fell after a report showed retail sales rose at the slowest pace in eight months in June, undermining an expansion in Africa’s biggest economy. The rand gained.

Retail sales rose 1.9 percent from a year earlier, compared with 6.2 percent in May. The median estimate of 14 economists in a Bloomberg survey was 3 percent. The rate of manufacturing growth declined in June and mining output contracted, reports showed last week. The central bank left the repurchase rate at a three-decade low of 5 percent to support an economy forecast to expand 2 percent this year, the slowest pace since a 2009 recession.

“With growth still well below trend” and the inflation rate falling, “it seems highly unlikely that the Reserve Bank will be in a hurry to hike,” Carmen Nel, a Cape Town-based analyst at Rand Merchant Bank, said in e-mailed comments.

Yields on benchmark 10.5 percent bonds due December 2026 dropped two basis points, or 0.02 percentage point, to 8.28 percent as of 1:53 p.m. in Johannesburg. The rand appreciated 0.2 percent to 9.9759 per dollar.

To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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