The Reserve Bank and ratings agency S&P Global have countered market euphoria with a more measured view of SA’s outlook that emphasised that there were still big risks to its ratings and the rand. As the rand hit fresh highs on Thursday on speculation of an early exit for President Jacob Zuma, the Bank’s monetary policy committee kept interest rates on hold, despite a better inflation outlook, citing the risk that ratings agency Moody’s Investors Service could downgrade SA’s rating to junk status. The rand firmed to R12.14 to the dollar by Thursday evening. S&P’s Konrad Reuss told a conference in Sandton there had been no change in the key concerns — about growth, the budget and state-owned enterprise debt — the agency had flagged when it downgraded SA’s rating in November. Reuss emphasised, however, that S&P had put SA’s rating on stable outlook for the first time since the downgrade cycle began and said new leadership had the opportunity to implement reforms that would improve the...
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