Lesetja Kganyago gestures as he speaks during a panel session on the closing day of the WEF in Davos, Switzerland, on Friday. Picture: JASON ALDEN/BLOOMBERG
Lesetja Kganyago gestures as he speaks during a panel session on the closing day of the WEF in Davos, Switzerland, on Friday. Picture: JASON ALDEN/BLOOMBERG

Davos — SA’s investment-grade credit rating with Moody's is not at risk, Reserve Bank governor Lesetja Kganyago said on Friday.

Moody's is the only major credit rating agency to still classify SA’s long-term foreign-currency debt as investment grade, though it has recently highlighted some concerns over the economic and fiscal outlooks.

Moody's maintains a stable outlook for the rating but in October it cited a weaker fiscal outlook as a credit negative. This month, it said Africa's most industrialised economy would recover slowly this year.

“I have not seen anything that is credit-negative that has developed since Moody's last pronouncement on our credit rating,” Kganyago told Reuters at the World Economic Forum in Davos, Switzerland.

“(Nothing) has developed that would lead us to say the following risks have materialized and as such the rating is at risk,” he added.

SA officials have been at pains to reassure investors in Davos that the economy has turned a corner after nine years of stagnation under former president Jacob Zuma.

Kganyago said on Friday he was open to staying on as Reserve Bank chief once his current term ends in November, but he stressed any decision to extend his appointment rested with President Cyril Ramaphosa.

He said South Africa's inflation risks included oil prices and moves on global markets that could affect the rand.

“Domestically we will watch very closely what happens to unit labour costs and average wage settlements,” Kganyago said.

Data showed on Wednesday that December consumer inflation fell to 4.5 percent, the midpoint of the Reserve Bank's target range of between 3 and 6 percent.

Kganyago said after a monetary policy meeting this month that risks to the inflation outlook were moderately on the upside, despite an improvement in near-term price pressures.

Reuters