South Africa’s Sovereign Credit Rating Kept at BBB by FitchRene Vollgraaff
South Africa’s credit rating was kept unchanged by Fitch Ratings, six months after putting the nation on negative outlook and raising expectations of a downgrade.
The foreign-currency rating remains at BBB, the second-lowest investment grade level, in line with Brazil and Russia, the company said in an e-mailed statement. The outlook on the rating was kept at negative. The local currency rating was kept at BBB+.
Standard & Poor’s, which maintained its rating a step above junk earlier today, and Moody’s Investors Service have both downgraded South Africa this year. The Fitch decision not to follow suit will boost sentiment toward an economy that’s growing at the slowest pace since a recession in 2009.
Finance Minister Nhlanhla Nene announced plans in his mid-term budget in October to narrow the budget deficit to 2.5 percent of GDP in 2018 from 4.1 percent this year.
South Africa’s economy will probably grow 1.4 percent this year after strikes at mines and factories and power blackouts curbed output. The International Monetary Fund this week cut its 2015 growth forecast to 2.1 percent from 2.3 percent.
Moody’s downgraded South Africa’s sovereign rating by one level last month and raised the outlook on its assessment to stable from negative.
The yield on benchmark government rand bonds due in December 2026 has risen 37 basis points this month to 7.98 percent . The rand has slid more than 5 percent against the dollar over the same period, to a six-year low.