Moody’s warns against attacks on Reserve Bank

SA’s rating would be downgraded if “the strength and independence of institutions notably diminish.”  This is according to Zuzana Brixiova – Vice President – Senior Analyst, Sovereign Risk Group, at Moody’s. 

She was addressing the Moody’s Investors Service 12th annual sub-Saharan Africa summit in Johannesburg today.

Other reasons for a rating downgrade would be if SA’s emerging policy framework becomes even less predictable or undermined economic or fiscal strength – and if liquidity pressures begin to re-emerge at State Owned Enterprises that would elicit pronounced government intervention.

However, Brixiova said Moody’s could stabilize the outlook if the SA government were to implement policies and reforms that:

  • indicated the continued independence and strength of policy institutions, and
  • enhanced medium-term growth and stabilized the government’s debt burden.

 

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