Economists warn a downgrade by S&P will affect all South Africans
Economists warned a downgrade by Standard & Poor's to junk status could have a number of consequences.
CAPE TOWN - Economists have warned that a downgrade by Standard & Poor' s global to junk status could have a number of consequences.
The ratings agency is expected to make its announcement tomorrow.
The country is currently one notch above sub investment status. LISTEN: How long does it take to recover after a downgrade to junk?
LISTEN: How long does it take to recover after a downgrade to junk?
A downgrade of South Africa's credit rating will affect all South Africans.
Economist Dieter von Fintel said, "The real concern for an ordinary South African is what it is going to do for interest rates, what it is going to do for the exchange rate and what's it going to do for investor confidence."
Market analyst Jana van Deventer says junk status could force the Reserve Bank's hand to raise interest rates.
"Potentially even higher than what we otherwise would see were it not for the downgrade."
The bank has recently decided to keep interest rates at 10.5 percent but some economists are expecting another increase later this year.