When the Reserve Bank’s monetary policy committee met in January, the primary risk featuring in its discussions was the prospect of a sovereign credit ratings downgrade, which could have had a significant impact on the rand and bond yields. The key issue was the coming February budget, which was seen as key to avoiding a downgrade. The downgrade risk was one big reason for the committee opting to leave interest rates unchanged. But as the committee begins its meeting on Monday, SA has not only escaped being junked by Moody’s but has also, unexpectedly, had the ratings outlook upgraded from "negative" to "stable". Moody’s Friday night statement was fairly realistic about the growth and political risks that still face the Ramaphosa administration. It warned that it would take a dim view if the policy approach to land expropriation or the Mining Charter goes in a direction that indicates the government is less than committed to improving the environment for investment and growth. Moody...
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