This week, all eyes will be on Thursday’s Reserve Bank monetary policy committee meeting and its interest-rate decision. Many economists expect the repo rate to remain unchanged at 6.75% as the rand remains a risk to inflation. "The rand still remains vulnerable to fiscal and sovereign credit ratings outcomes during the first quarter of 2018," says Investec economist Kamilla Kaplan. SA’s credit rating with Moody’s Investors Service is one notch above noninvestment grade and a downgrade would trigger the exclusion of South African bonds from the World Government Bond index, with the resultant forced selling of local bonds estimated at up to R200bn. While Moody’s has not confirmed when it will review SA again, it is likely to be after the 2018 budget policy statement in February. "Although the new ANC leadership was welcomed by the markets and the rand moved to stronger levels, decisive … action is required to tackle corruption, restore fiscal sustainability and improve governance at ...
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