Ratings downgrade averted, but risks high
President Cyril Ramaphosa intends to hold a jobs and an investment summit later this year
South Africa has averted another ratings downgrade but the world's largest ratings agency, S&P Global, has made it clear it will be monitoring how government executes policy to improve growth. S&P held South Africa's credit rating steady at BB for foreign currency and BB+ for local currency. Both have stable outlooks. This maintains the debt rating in sub-investment grade or junk status, a move that was widely expected ahead of the late-night announcement on Friday. The news means that currency and bond yields may not weaken significantly in coming days. Debt costs have risen since April as bond yields spiked from 7.99% to about 8.66% on May 23, but retreated to 8.42% on Friday. The rand has also weakened since February as a result of heightened global risks. Gordon Kerr, fixed-income specialist at RMB, said on Friday: "Local bonds continue to find their feet, even as the geopolitical environment sours." Bidding was mostly driven by offshore interest. Alvin Chawasema, a fixed-income...
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