Fitch affirms South Africa

Fitch Ratings said it affirmed South Africa's foreign-currency issuer default rating at BBB+ and local-currency issuer default rating at A, both with stable outlooks. The agency also affirmed the short-term rating at F2 and the country ceiling at A-.

The financial market correction that affected most major emerging markets in May/June has changed the macroeconomic outlook for South Africa, the agency said. In South Africa's case, the currency fallout was more severe than in most other emerging markets, reflecting a marked deterioration in the current account deficit in the first quarter of 2006.

Interest rates are being tightened to curb rising inflation from a weaker currency and high global oil prices as well as to address domestic imbalances. Growth forecasts have been adjusted downwards and Fitch predicted slower progress in external financial indicators - two factors that had been underpinning recent improvements in creditworthiness.

Nevertheless, the agency said the currency correction will help rebalance the economy while South Africa's ratings remain supported by sound macroeconomic fundamentals - robust public finances, moderate external debt ratios, an improving growth performance and relatively low inflation.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.