Gigaba: Downgrades had minimal impact on Govt Pension Fund

However, Malusi Gigaba says the Public Investment Corporation has warned the probability of more downgrades for rand denominated debt into junk territory remains high.

FILE: Finance Minister Malusi Gigaba. Picture: Reinart Toerien/EWN.

CAPE TOWN - Finance Minister Malusi Gigaba says credit rating downgrades have had a “minimal” impact on the Government Employees Pension Fund.

His statement was in response to a parliamentary question posed by the Democratic Alliance (DA).

Earlier this year, South Africa was downgraded by three major agencies, with Fitch the only one to downgrade the country’s rand denominated debt to junk status.

In his reply, Gigaba explains the performance of the Government Employees Pension Fund has not suffered following the downgrades.

That’s according to the Public Investment Corporation (PIC), which manages the fund’s assets valued at R1.6 trillion.

However, Gigaba says the PIC has warned the probability of more downgrades for rand denominated debt into junk territory remains high. The view is brought about by sluggish economic growth and troubling business confidence.

Gigaba adds strategies to mitigate the effects of further downgrades have not been implemented yet.

(Edited by Zamangwane Shange)