ANA
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1 minute read
25 Nov 2016
8:27 pm

Treasury sees positives in Fitch Ratings’ outlook

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Despite the downgrade, Fitch affirmed the long-term foreign and local currency issuer default ratings.

AFP/File / Miguel Medina
Fitch Ratings agency, pictured on August 8, 2011 in Paris, downgrades Ukraine's credit rating a notch deeper in junk territory, saying the conflict-hit country appeared likely to default

National Treasury has seen the light at the end of the tunnel as Fitch Ratings agency affirmed its ‘BBB-‘ ratings on the South African government’s long term debt held in foreign and local currencies, despite revising South Africa’s outlook to negative from stable.

This comes after Fitch Ratings on Friday adjusted South Africa’s outlook due to political risks and policy uncertainty within government, in-fighting within the ruling African National Congress, and weak economic growth.

But Fitch affirmed the long-term foreign and local currency issuer default ratings.

In a statement, Treasury said efforts made by South Africa to keep the country on an investment grade had paid off, including ensuring stability on public finances, the revised Integrated Energy Plan and the recently proposed national minimum wage of R3,500 per month.

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“All these developments have ensured an investment grade status for South Africa,” Treasury said.

“If we continue at this pace and with such strong collaborations with a common goal, we will revise course and place South Africa on a sustainable path of faster and inclusive growth.”

Still, Treasury acknowledged as a threat to investment grade status Fitch Ratings’ reasonings for revising South Africa’s outlook to negative from stable.

“The fact that the country’s investment grade status has been maintained demonstrates the resilience of the country and its people, especially during difficult times, to achieve a common mission,” Treasury said.

“In this regard, government sincerely thanks all South Africans for their efforts in ensuring that the country does not lose its investment grade status and we urge all South Africans to continue this close working relationship with government over the period ahead.”

– African News Agency