Concerns raised over SA's growth ahead of ratings decisions

Reserve Bank Governor Lesetja Kgayago announced on Thursday that the Monetary Policy Committee was keeping the repo rate unchanged.

FILE: Moody's Ratings agency. Picture: Facebook.

JOHANNESBURG - There are concerns that growth will be hindered with significant capital outflows if ratings agencies Moody’s and Standard & Poor’s Global downgrade the country on Friday.

Fitch announced on Thursday that if was keeping its sub-investment rating unchanged at BB plus with a stable outlook.

Reserve Bank Governor Lesetja Kgayago announced on Thursday that the Monetary Policy Committee was keeping the repo rate unchanged.

But he says this outlook could change if there are further downgrades.

S&P Global has South Africa’s foreign currency debt at junk status but the local currency debt is still one notch above sub-investment grade.

Moody’s has both local and foreign currency debt one notch above junk.

Kganyago says the bank is now awaiting their decisions.

“They meet in committee and when they arrive at a decision, they will communicate the decision.”

Nedbank economist Johannes Khoza says the agencies may wait.

“I believe that they will still wait for the election conference and maybe push it after the budget.”

There are concerns that problems highlighted in the medium-term budget speech will have a bearing on the ratings.

(Edited by Leeto M Khoza)