EDITORIAL: No time to be rash over rates
The most obvious and immediate of the risks is that the monetary policy committee’s decision comes just a day ahead of the updates of SA’s sovereign ratings
When the monetary policy committee makes its final interest rate pronouncement for 2017 on Thursday, "risk" is likely to loom large in its narrative. The most obvious and immediate of the risks is that the committee’s decision comes just one day ahead of the updates of SA’s sovereign rating by S&P Global and Moody’s Investors Service. That at least one of the agencies will downgrade SA’s local currency rating is a done deal after the government retreated from any promise of fiscal consolidation in October’s medium-term budget policy statement and the president’s attempts to impose free fees on the fiscal framework drove out Treasury budget office head Michael Sachs. S&P, which junked SA’s foreign currency rating earlier in 2017, had expected much more from the October budget and is almost certain to junk the local currency rating this time around. Moody’s tends to be slower to decide, but even if it does not junk both ratings this time, it will put them on watch for a downgrade with...
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