State Firms' Debt May Threaten Financial Stability, South Africa’s Central Bank Says
- Inability to roll over debt may affect South Africa ratings
- Increased use of guarantees adds pressure to state finances
The headquarters of the South African Reserve Bank stand in the Central Business District in Pretoria.
Photographer: Waldo Swiegers/BloombergThis article is for subscribers only.
The inability of South African state-owned companies to roll over debt could threaten the nation’s financial stability and ultimately result in more credit-rating downgrades, according to the central bank.
Governance issues at state companies, rising contingent liabilities and inadequate liquidity could add pressure to government finances through the increased use of guarantees, the Reserve Bank said in its six-monthly Financial Stability Review released in Pretoria on Wednesday.