Policy certainty and less corruption could heal the economy, says Lesetja Kganyago
Investment-friendly ambitions will boost confidence — ‘the cheapest form of stimulus’, says the Reserve Bank governor
All that is required to turn around SA’s economy is to fix "regulatory and policy uncertainty as well as corruption and a lack of direction in some areas", South African Reserve Bank governor Lesetja Kganyago told a conference in New York on Thursday night. "Setting out some investment-friendly ambitions for the economy and reducing political uncertainty would go a long way towards boosting confidence. As is often said, raising confidence is the cheapest form of stimulus," Kganyago said at the fifth SA Tomorrow Investor Conference. The head of SA’s central bank indicated he was bracing himself for the country’s sovereign credit rating to be reduced to junk by Moody’s and further into junk by S&P Global Ratings on November 24. Many fund managers have mandates prohibiting them from holding junk bonds, and SA wold also fall out of the major bond indices. So a downgrade spells a huge outflow of foreign investment in government bonds.
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