Friday, 06 May 2016 13:16

Capital outflows likely if SA downgraded

Written by
Rate this item
(0 votes)

The Reserve Bank says a further rating downgrade of South Africa could lead to capital outflows.

 South_African_Reserve_Bank

Releasing the Financial Stability Review on Tuesday, the central bank said for more than a year credit rating agencies have been concerned about South Africa’s rating.

In March, Moody’s Investors Service visited South Africa for its annual review. Earlier in that month, the ratings agency had placed South Africa’s long and short term ratings of “Baa2” and “P-2”, respectively, on review for a possible downgrade.

“The impact of a further ratings downgrade on the South African economy and financial system could manifest in the form of capital outflows and potential spill overs to rand-denominated South African government debt,” said the Reserve Bank.

The review - which aims to identify and analyse potential risks to financial system stability - said the persistent weak economic fundamentals, the current account deficit, budget deficit and other structural constraints led to a downgrade in the economic outlook for the country to negative.

The publication said although the 2016 Budget Speech ensured the continuation of fiscal discipline, rating agencies are still concerned about the implementation of the measures outlined in the speech.

“Rating agencies will closely monitor other factors, including economic growth,” said the bank. 

Last modified on Friday, 06 May 2016 13:25

Most Popular

Introducing cutting edge tech to the property industry

Feb 28, 2017
Virtual Reality Technology
Positioning ourselves at the cutting edge, Fieldspace Property Group is transforming the…

Calling all Cape Town owners and managers of commercial buildings and operations: Let’s talk energy and water

Mar 04, 2017
CoCT Energy Efficiency Forum
Join us for the Energy Efficiency Forum on 16 March at 8:30 for 9:00 until 12:30 followed…

REBOSA opposes racist property advertisement in the strongest terms

Mar 02, 2017
Jan le Roux REBOSA
The real estate industry has been placed under an uncomfortable spotlight yet again with…

Making green affordable housing a reality

Mar 07, 2017
Belhar Gardens
Nedbank Corporate and Investment Banking (NCIB) today announced that is has made the…

Gallo Manor one of Joburg's best kept secrets - Property market remains upbeat in sought after Sandton suburb

Mar 11, 2017
Gallor Manor R2 85 million
One of Johannesburg’s best kept secrets is Gallo Manor, a leafy residential suburb…