International ratings agency Fitch Ratings has aligned South Africa’s long-term local currency rating to the long-term foreign currency rating at ‘BBB-’ with a stable outlook.
This followed a recent update to Fitch’s Sovereign Rating Criteria, which is the methodology it uses to rate all sovereigns.
The review was aimed at, besides other things, assessing the relationship between existing rating of long-term local and foreign currency debt in line with the guidelines in the updated criteria.
The revised guidelines by the agency reflect its assessment that the credit risk profile of sovereign local and foreign currency debt should be closely aligned.
“Although the action represents an alignment, it also serves as a timely reminder of the risks of a downgrade that lie ahead and the urgency of actions required to reinvigorate the economy,” the National Treasury said on Tuesday.
It added that South Africa must persist with, and redouble efforts to work together to improve growth prospects and to create more business and work opportunities.
The National Treasury also noted that government’s National Development Plan and the nine-point plan already identified some of the reform measures that, if implemented diligently, would alter the country’s fortunes in the period ahead.