Standard & Poor's, a major international rating agency, today released their credit rating on the Republic of South Africa. This follows a due diligence exercise that took place in November 1999. We are pleased to announce that South Africa's rating for foreign currency bonds and notes has been upgraded to investment grade (BBB-), short-term foreign currency to A-3 and long-term domestic currency rating to A-minus. The rating outlook for the ratings is stable.
This is a resounding vote of confidence in our economy. This investment rating means that South Africa can now attract investors who are currently buying only investment grade rated debt. It would also contribute to the lowering of the borrowing costs for the government and other issuers.
Standard & Poor's cited South Africa's usual strengths.
S & P are however, still concerned about the country's external liquidity, though they acknowledge that the position is on an improving trend. The other areas that they are concerned about are low level of savings and investment and labour market rigidities.
The decision by Standard & Poor's brings to a full investment grade status. "Cautious fiscal and monetary policies, coupled with microeconomic reforms, should underpin South Africa's investment-grade ratings over the coming years", S & P said.