South Africa borrowed on December 13 a total of ZAR 800mn ( EUR 56.2mn ) through the auction of three inflation-linked Treasury bond issues, in line with its target, data from the central bank showed. The central bank sold ZAR 195mn of the R I2025 issue, ZAR 300mn of the R I2038 issue and ZAR 305mn of the R I2046 issue. Yields edged down. Details are in the table below. Inflation-linked bonds provide investors with a natural hedge against inflation – the CPI index as published by Statistics South Africa, as well as a yield in excess of inflation. The principals of the inflation-indexed bonds are linked to inflation, which serve to minimise inflation risk. This means their principal is increased by the change in inflation over a period. R I2025, due Jan 31, 2025 , 2% coupon R I2025, due Jan 31, 2025 , 2% coupon R I2038, due Jan 31 2038, 2.25% coupon R I2038, due Jan 31 2038, 2.25% coupon R I2046, March 31, 2046 , 2.5% coupon R I2046, March 31, 2046 , 2.5% coupon Auction date 13-Dec-13 6-Dec-13 13-Dec-13 6-Dec-13 13-Dec-13 6-Dec-13 Total amount allocated (ZAR mn) 195 330 300 215 305 255 Total bids received (ZAR mn) 1,380 585 360 265 415 355 Bid-to-cover ratio 7.08 1.77 1.20 1.23 1.36 1.39 Clearing yield 1.83% 1.87% 2.29% 2.30% 2.40% 2.41% Source: South African Reserve Bank
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