Treasury: SA committed to predictable & consistent policy framework

Treasury says while the leadership of the finance portfolio has changed, government’s overall policy remains the same.

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JOHANNESBURG – The Treasury has given its first reaction to the Standard & Poor’s downgrade, saying the country is committed to a predictable and consistent policy framework, which responds to changing circumstances in a measured and transparent fashion.

Treasury says while the leadership of the finance portfolio has changed, government’s overall policy remains the same.

Spokesperson Mayihlome Tshwete says: “Whatever changes happen in the political executive, the policy of government remains the same. The direction that government is trying to undertake remains the same.”

Tshwete says government remains committed to a measured fiscal consolidation that stabilises the rise in public debt.

“Commitment to the budget that have already been passed through to Parliament remains the same. So these are issues that we’re going to be quite clear on, in terms of our messaging.”

Treasury says the latest developments call for South Africans to reflect on the need to sustain and act with urgency to accelerate inclusive growth and development.

MOODY’S PUT SA ON REVIEW

Moody’s ratings agency placed South Africa's sovereign credit rating on review for downgrade on Monday, saying that the decision was prompted by an abrupt change in leadership of key government institutions.

South Africa’s sovereign is currently two notches above non-investment grade at Baa2.

The review will allow Moody’s to assess these risks and if the changes in leadership signals a weakening in the country's institutional, economic and fiscal strength.

South Africa’s (P) Baa2 Senior Unsecured Shelf and MTN program ratings were also placed under review for downgrade, as was the (P)P-2 Senior Unsecured Short-Term rating.

The country’s long-term local-currency bond and bank deposit country ceiling remain unchanged at A1. The long-term foreign-currency bond and bank deposits country ceilings remain unchanged at A2 and Baa2, respectively.

TREASURY ON DOWNGRADE

Treasury released a statement on Monday evening, saying it’s noted the downgrade.

It says newly installed Finance Minister Malusi Gigaba will hold a briefing.

Treasury says it's committed to a stable fiscal policy after rating agency S&P Global announced South Africa's downgrade to junk status citing the recent political developments.

Tshwete said: “The issues that they have raised are matters around the political matters. The minister will be announcing the interventions he is going to be making to try and resolve or stabilise the concerns that they have brought up.”

(Edited by Leeto M Khoza)