JOHANNESBURG – Rating companies Moody’s Investors Service and S&P Global Ratings responded positively to decisions taken in South Africa’s budget, said Treasury Deputy Director-General.
“They were very positive,” said Ratsoma in an interview on Wednesday.
“They indicated areas of concern after the medium-term budget policy statement and I think they must agree we’ve addressed all of those,” Ratsoma added.
Ratsoma, who is in charge of economic policy, also said that treasury officials will speak with Fitch Ratings on Thursday.
Finance Minister Malusi Gigaba announced tax increased and spending cuts to narrow the fiscal deficit and curb debt. Fitch and S&P lowered South Africa’s foreign and local currency credit ratings to non-investment grade last year, which cited policy uncertainty and concerns about the management and finances at state-owned companies.
According to estimates by Citigroup, if Moody’s decide to reduce the local-currency debt to non-investment grade, South Africa will exit the Citibank World Government Bond Index, sparking forced sales by investors who track the gauge and leading o outflows of as much as R100 billion rand in the nation’s bond market.
The yield on rand-denominated bonds in December 2026 declined 12 basis points to 7.98% Wednesday, the lowest since May 2015. Avoiding a cut by Moody’s is the Treasury’s key focus at the moment, said Gigaba
Photo Credit- The Financial Express