MARK BARNES: Abandon the divide between private sector business and government

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Banks can take deposits at 3.3% and then on-lend that money to the government at, say, the prime rate of 7%

The current sovereign debt landscape looks like this: the 10-year RSA bond is trading at a yield of about 9%, and 20- to 30-year bonds are above 11.5%.

SA’s current credit rating is BB-, below investment grade, SA’s five-year credit default swap quote implies a probability of sovereign default of a little over 5%. A tough place to raise money, with CPI at 3%.A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Sunday Times Daily.

 

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