OWN CORRESPONDENT, Johannesburg | Wednesday 7.30PM.
INTERNATIONAL rating agency Duff and Phelps Credit Rating Company (DCR) on Wednesday reaffirmed South Africa’s BBB- long-term foreign currency and A- long-term rand ratings. The London-based agency added that the outlook on rating remains solid.
In its review, DCR said the ratings were reaffirmed due to the government’s “due diligence” in managing the economy and balances “general concerns about the country’s fragile liquidity conditions in the current framework of international financial volatility” with DCR’s “more optimistic views on long-term creditworthiness and the implementation of the government’s economic programme”.
Notwithstanding current pressures — including the Reserve Bank’s weak net reserve position and the private sector’s relatively large short-term external liabilities — DCR said it is confident that the South African authorities have at their disposal, and are willing to use, a wide range of policy tools to defuse short-term attacks on the currency.
Responding to the affirmation, the finance ministry on Wednesday night said DRC’s rating supports their stance that South Africa’s underlying economic fundamentals are sound.