South Africa’s 10-year government bond yield eased further to below 9%, a new low since late January, supported by higher real returns amidst expectations of US rate cuts. The country, a top global gold producer, also benefits from the metal’s ongoing strength, further boosting its investment appeal. Real yields remain among the highest in emerging markets, supported by credible monetary policy, a more stable currency than in the past, and structural improvements such as more reliable electricity and increased infrastructure investment. Local bonds have also benefited from the Reserve Bank’s implicit shift of its inflation target toward the lower end of the 3%–6% range. At the same time, the South African government is making progress on fiscal consolidation, on track to stabilize its debt burden and achieve a larger primary surplus this year.