LUKANYO MNYANDA: Why ratings agencies matter and interest rates won’t be cut soon
What is harder to forecast is whether the government will do what is needed to avert more downgrades
Less than a month after Moody’s Investors Service warned SA about its debt metrics and lack of economic growth, another agency, S&P Global, has done the same. So if there was any doubt about why the Reserve Bank decided against cutting interest rates on Thursday, that should be dispelled.
It wasn’t exactly a shock that S&P downgraded its outlook to negative. The reasoning behind the decision was predictable. What’s harder to forecast is whether we will do what is needed to avert more downgrades.