Guiding consumers since 2009

Rating agency downgrades long term foreign currency rating

By Staff Writer

Standard & Poor’s (S&P) announced last week that it had cut South Africa’s long term foreign currency credit rating from “BBB+” to “BBB” and the long term local currency credit rating from “A” to “A-”.


The S&P downgrade comes after Moody’s Investors Service downgraded the country’s sovereign rating from A3 to Baa1 in September.


The global credit rating agency gave the following reasons for the downgrade:


1.    The recent strikes in the mining sector were likely to feature in political debates in the run up to the 2014 general elections and thereby increase policy uncertainty;
2.    Underlying social tensions may result in amplified spending pressures, thereby undermining the fiscal consolidation path; and
3.    It also said the weaker business investment climate may weigh on South Africa’s economic growth prospects.


National Treasury said Cabinet had approved the fiscal framework for the next three years and that the deals will be announced by the Minister of Finance on 25 October 2012. Treasury said its fiscal framework continued to be guided by counter cyclicality, debt sustainability and intergenerational equity.


“We believe our fiscal plan is realistic and achievable. There is no historical evidence to support S&P’s assertion that “...underlying social tensions will increase government spending pressure...” Indeed our young democracy has seen several elections within the ruling party and government. None of these have impacted policy and budgeting in the manner that S&P suggests,” said Treasury in a statement.


It added that Government would continue to invest in infrastructure and that it was working with all parties to bring about an immediate end to the wildcat strikes.

Recent Articles

Featured How are you taxed on your retrenchment package?

Unemployment is one of the biggest problems in South Africa. The emergence of the Covid-19 pandemic has exacerbated the situation with a lot of companies retrenching their employees.  When retrenched, you’ll receive a retrenchment package, but do you know how much tax you’re liable for?

Car repossessed – don’t be taken for a ride

When the country is facing an economic downturn, chances are your finances will feel the pinch. This can lead you to make bad financial decisions such as skipping your vehicle payments. But every decision has consequences and if you don’t pay your instalment, the bank will repossess your car. But what can you do when this happens?

 

Why you should consider gap cover

Your medical aid should protect you from incurring large medical bills when you’re sick. But what if your plan doesn’t cover the full cost of your medical expenses? We got in touch with insurance experts to find out whether gap cover is worth having.

Debt relief - What is your bank offering?

Going through a financial crisis is stressful whether it be as a result of losing your job, being short-paid, having to fork out towards an emergency payment, or finding yourself in the midst of a global pandemic. This is especially taxing if you have a debt to service. It is against this backdrop that banks are increasingly offering payment holidays. Justmoney looks at the various debt relief options available to you from the big five banks.

Deals

Premier Hotel and Resorts Special For Senior Citizens

Price: Available on request
When: Daily
Where: Nationwide

The President hotel 10% discount for locals

Price: Available on request
When: Until 31 October 2020
Where: Cape Town

Get 40% off when you book your stay at Colosseum Hotel

Price: Available on request
When: Until 13 December
Where: Cape Town


Latest Guide

Guide to debt rehabilitation solutions