Johannesburg - Long-term interest rates in South Africa are likely to keep weakening for the foreseeable future as institutions feel the strain of increased borrowing, said chief economist from Econometrix, Dr Azar Jammine, on Tuesday.

"There is tremendous strain on authorities and institutions to keep buying," he said at an investment event in Rosebank.

Jammine notes that long-term rates around the world have risen in the last three or four months in anticipation of the global recession slowing and a recuperation in inflation.

"Also, government has to borrow more than originally thought," he added.

Jammine says that while the credit rating upgrade by Moody's has "helped quite a lot" as international pensions now look to invest more readily in SA bonds, everything hinges on monetary management going forward.

He notes that international funds are prepared to buy local bonds at a better level compared with other countries, like Brazil, India and Turkey.

- I-Net Bridge