SARB changes could affect SA’s ratings

A change in the mandate of the South African Reserve Bank, allowing it to move away from inflation targets, could affect South Africa’s sovereign ratings, Standard & Poor’s* said yesterday.

But the ratings agency said in a report that economic policies were unlikely to shift away from a previously prudent stance – a key risk to its ratings – despite the increased influence of more leftist leaders.

S&P said South Africa’s flexible exchange rate and inflation target were the cornerstones of its current macroeconomic framework.

“Any major changes that we see as having a practical bearing on the South African Reserve Bank’s role, and/or on its credibility in managing expectations, could be relevant to the sovereign credit rating, and would therefore be assessed,” S&P said. – Reuters

Source: The Sowetan

* Standard & Poor’s is an independent provider of credit ratings. In 2008, they published more than one million new and revised credits ratings and have rated more than US$32 trillion in outstanding debt.