Great anticipation ahead of looming ratings announcement
Standard & Poor’s is expected to make its credit rating announcement this evening.
JOHANNESBURG - There is great anticipation ahead of Standard & Poor's Global is expected rating announcement in the next few hours.
Finance Minister Pravin Gordhan along with the Treasury, business and unions have been lobbying to keep the country from falling into junk status.
But, the country has been struggling with economic growth, with latest estimates saying it's around point-five percent.
The local economy has faced a number of challenges since December when President Jacob Zuma fired Finance Minister Nhlanhla Nene, sending the rand into tailspin.
There was a drop in business and investor confidence.
However ahead of the announcement, the local currency has improved by around two percent - at around 5pm, the rand was trading at around 15.31 to the dollar and 22.23 to the pound.
Hopefully, S&P's Global will decide not to downgrade the country to sub-investment level - and the country will be given another chance to show that if can achieve sustained growth.
AFTER MONTHS OF CAMPAIGNING AGAINST POSSIBLE DOWNGRADE, SA WAITS
Months of intense campaigning through a united front comprising by the finance ministry, business and unions is expected come to a head shortly with S&P global announcing its rating decision.
There has been a collective effort to keep the country from falling into junk status.
However, poor growth and political infighting are just some of the negative pressures that may cause the agency to downgrade the country
In November last year, most ratings agencies forecast growth over one percent for this year.
However, a number of factors have seen this target fall away.
With the firing of Nhlanhla Nene this came a drop in business and investor confidence, while the drought and declining world economic growth have also affected the local economy.
Added to this, the rand has been on a rollercoaster ride over the past few weeks with a number of political developments involving Gordhan, the South African Revenue Service and the Hawks not helping the local currency.
Hopefully there will be good news from S&P Global, which will have a positive effect on the local currency and the economy.