{"id":178427,"date":"2017-06-11T02:07:42","date_gmt":"2017-06-11T00:07:42","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=178427"},"modified":"2017-06-11T02:26:07","modified_gmt":"2017-06-11T00:26:07","slug":"treasury-warns-of-more-credit-rating-shocks-after-moodys-downgrade","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/178427\/treasury-warns-of-more-credit-rating-shocks-after-moodys-downgrade\/","title":{"rendered":"Treasury warns of more credit rating shocks after Moody\u2019s downgrade"},"content":{"rendered":"

National Treasury warned that the Moody\u2019s rating downgrade with a negative outlook \u201cindicates that the risk of further downgrades is still there\u201d.<\/p>\n

Treasury issued a late-night statement on Friday, after Moody\u2019s announced that it had downgraded the country\u2019s long-term foreign and local currency debt ratings one notch from Baa2 to Baa3, and gave it a negative outlook.<\/p>\n

Earlier this year, following the Cabinet reshuffle where President Jacob Zuma replaced former Finance Minister Pravin Gordhan with former Home Affairs Minister Malusi Gigaba, the ratings agency placed South Africa on review for a downgrade. At the time both Fitch and S&P downgraded the foreign currency rating to junk status.<\/p>\n

Democratic Alliance finance spokesperson David Maynier said the decision by Moody\u2019s is a vote of no confidence in Finance Minister Malusi Gigaba and President Jacob Zuma.<\/p>\n

\u201cThe decision by Moody\u2019s highlights the fact that \u2018political developments\u2019 have had a negative effect on \u2018institutional strength\u2019, which \u2018casts doubt over the strength of and sustainability of the recovery in growth and stabilisation of the debt-to-GDP ratio over the near term\u2019,\u201d he said, citing an earlier statement by Moody\u2019s.<\/p>\n

\u201cThe ratings action means our long-term local currency debt, which forms 88.2% of our R2.2trn net debt, now hovers dangerously at one notch above \u2018junk status\u2019, with a negative outlook, following ratings actions by the two most important ratings agencies, Moody\u2019s and Standard & Poor\u2019s.\u201d<\/p>\n

In response, the DA has written to the National Assembly Speaker Baleka Mbete, calling for a \u201csnap debate\u201d on measures to deal with the recession, ratings downgrades and mass unemployment in South Africa.<\/p>\n

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<\/div>\n

Meanwhile, Treasury said government calls on all South Africans, \u201cincluding the private sector and trade unions to work even harder together to address these concerns\u201d.<\/p>\n

Treasury attempted to soothe rating agency fears, pledging that the \u201coutcomes of the conferences of the African National Congress in June and December 2017 are not expected to translate to policy changes\u201d.<\/p>\n

\u201cThe publicly announced draft policies should cement concerns of policy deviations in the next five years,\u201d it said.<\/p>\n

\u201cThe urgent priority is reigniting confidence as well as reclaiming and maintaining the investment grade ratings.<\/p>\n

\u201cThe Minister of Finance will ensure that the joint work of government, business, labour and the civil society continues at a faster pace.<\/p>\n

\u201cThe commitment is on improving investor and consumer confidence through fast-tracking the implementation of the structural reforms on economic growth.<\/p>\n

\u201cGovernment would like to thank all stakeholders who participated in the rating review process and hope that such collaborations will continue,\u201d said Treasury.<\/p>\n

News24<\/a><\/p>\n

\n

Read: Cabinet reshuffle was rational \u2013 and ratings agencies got it all wrong: Zuma<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

National Treasury warned that the Moody\u2019s rating downgrade with a negative outlook \u201cindicates that the risk of further downgrades is still there\u201d.<\/p>\n","protected":false},"author":35,"featured_media":137373,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[25],"class_list":["post-178427","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-active"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/178427","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=178427"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/178427\/revisions"}],"predecessor-version":[{"id":178429,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/178427\/revisions\/178429"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/137373"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=178427"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=178427"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=178427"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}