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Currency impact on debt 'not severe'

Cape Town - Currency volatility will have a limited impact on servicing South Africa's national loan debt, finance director-general Lungisa Fuzile said on Wednesday, as Treasury unveiled its medium-term budget review.

"The changes in interest payment as a result of currency movement are not that huge," he told a media briefing ahead of Finance Minister Pravin Gordhan's speech to Parliament.

"[But] I don't say they don't matter."

Gordhan added that the government had also deliberately kept its borrowing in foreign currency to manageable levels.

According to the budget policy statement, interest payments are the fastest growing item in the consolidated fiscal framework.

"By 2016/17, more than R140bn will be required to service public liabilities, an amount that exceeds current spending on health care," it stated.

The country's total net loan debt was estimated to reach R1.37 trillion, or 39% of GDP, in the current financial year.


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