October 25, 2017 / 1:23 PM / a year ago

Budget upset sends South Africa CDS to 3-week high

LONDON, Oct 25 (Reuters) - The cost of insuring exposure to South African debt rose on Wednesday to the highest since Oct. 2 after the country’s budget deficit forecast was widened by the government to an eight-year high.

Five-year credit default swaps (CDS) for South Africa rose 6 basis points (bps) from Tuesday’s close to 182 bps, data from IHS Markit data showed.

The 4.3 percent deficit forecast was wider than economists had expected. South Africa’s Treasury also halved its economic growth forecast for 2017 to 0.7 percent and said annual growth would remain below 2 percent for the next three years.

Reporting by Claire Milhench

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