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SA to Remain Financially Stable
| News by Staff ReporterThis is according to the Department of Finance and the SA Reserve Bank
The South African economy is capable of weathering the recent downgrade of the U.S. government’s credit rating, according to the department of finance and the reserve bank.Standard & Poor recently downgraded the United States government’s credit rating from the top-notch AAA to AA+ as a result of its $14-trillion debt. The debt is owed to the U.S. public, businesses and foreign governments.
In a joint statement from Minister of Finance Pravin Gordhan and South African Reserve Bank (Sarb) governor Gill Marcus, it was said that: “Our financial system remains strong, with adequately capitalised financial institutions supported by a robust regulatory framework.”
The statement also centred on the effects the U.S.’s credit rating downgrade would have on Europe’s own debt concerns, and what impact overall these would have on South Africa’s financial stability.
It was speculated after the downgrading of the U.S.’s credit rating that the effects would spill over into Europe and hamper recovery efforts amid its own financial crisis.
On the home front, however, Pravin Gordhan and Gill Marcus said South Africa had been given an Investment Rating by rating agencies.
“Standard and Poor’s, in particular, affirmed South Africa’s sovereign rating and even revised the rating outlook from negative to stable.
“These ratings are a testimony to our sound management of the economy and public finances and demonstrate confidence in our fiscal consolidation measures,” according to the statement.
“South Africa will, as a member of G-20, remain in close contact with other member countries ready to take action to ensure stability and liquidity in financial markets.
“The National Treasury and the Reserve Bank will continue to actively monitor the situation to mitigate any financial stability risks and any adverse short term and long term effects on the broader economy.”
Source: www.bizpremises.co.za
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