Judging by the reaction in currency and bond markets, it would seem that finance minister Tito Mboweni’s medium-term budget policy statement (MTBPS) on Thursday failed to allay fears that the country is on its way to another damaging credit downgrade. Although Mboweni, who in his 10 years as governor of the Reserve Bank had to deal with more than a few episodes of rand volatility, won’t be alarmed by two days of currency moves, the rand’s 1.8% decline against the dollar is cause for concern. The immediate implication is that markets are not convinced that the government is committed to the type of discipline needed to get the fiscal position on a sustainable path. Moody’s Investors Service, the last of the major ratings companies to have SA’s debt in investment grade, has been delaying its SA country review. Now that the MTBPS is out of the way, we should expect its judgment to follow.

A little more than two months ago, it gave a rather pessimistic assessment of the fiscal-con...

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