Mboweni: Fitch & Moody's credit rating downgrades painful
Reacting to the news, Finance Minister Tito Mboweni said that there was an urgent need for government and its social partners to implement structural reforms to avoid further harm to the country's sovereign rating.
JOHANNESBURG - Finance Minister Tito Mboweni said that the decision by ratings agencies Fitch and Moody's to downgrade South Africa further into junk status was a painful one.
Moody's has lowered the country's credit rating one notch to BA2 and maintained a negative outlook.
It cited an expected weakening of South Africa's fiscal position as part of the reasons for its decision.
Meanwhile, Fitch has downgraded the country from BB to BB- with a negative outlook, highlighting high and rising government debt, coupled with weak growth and exceptionally high inequality.
However, S&P Global has decided to keep its ratings unchanged at BB- for its foreign currency rating and BB for its local currency, both with a stable outlook.
Reacting to the news, Mboweni said that there was an urgent need for government and its social partners to implement structural reforms to avoid further harm to the country's sovereign rating.
National Treasury is also urging South Africans to continue adhering to all COVID-19 regulations in order to avoid a second wave of infections, which could have devastating effects on the country's already limping economy.