Business News

South Africa's weak growth, rising debt could trigger deeper downgrades

South Africa’s failure to stabilise the country’s fiscal situation could see its credit rating downgraded deep into junk territory, the central bank said yesterday, just hours before two rating agencies were due to announce their decisions.

Africa’s most industrialised economy is on the brink of losing its investment-grade ranking on local currency debt from Moody’s and S&P Global Ratings. Both rate it on their lowest investment grade rung of Baa3/BBB-minus.

South African Reserve Bank deputy governor Daniel Mminele told an investor conference the sharp sell-off in local currency and domestic bonds recently was a clear indication of investors “nervousness about South Africa’s rising economic and fiscal risk”.

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