Pretoria - Fitch Ratings agency has aligned South Africa’s long-term local currency rating to long term foreign currency rating at BBB with a stable outlook, said National Treasury on Tuesday.
Treasury said although the action represents an alignment, it also serves as a timely reminder of the risks of a downgrade that lie ahead and the urgency of actions required to reinvigorate the South African economy.
Recently Fitch updated its Sovereign Rating Criteria, which is the methodology it uses to rate all sovereigns. Following the publication of the updated methodology, the agency then held a Sovereign Portfolio Review Committee of all its existing sovereign ratings on 19 July 2016.
The review was aimed at assessing the relationship between existing rating of long-term local and foreign currency debt in line with the guidelines in the updated criteria.
The revised guidelines by the agency reflect their assessment that the credit risk profile of sovereign local and foreign currency debt should be closely aligned.
National Treasury said the country must persist and redouble efforts to improve growth prospects.
“We must persist with, and redouble our efforts to work together with government, business and labour to improve our growth prospects and to create more business and work opportunities,” said Treasury.
The National Development Plan and the Nine-Point Plan already identified some of the reform measures. – SAnews.gov.za
