Kganyagosays Moody’s rating not at risk

South Africa’s investment-grade credit rating with Moody’s Investors Service is not at risk, the country’s central bank chief said on Friday.

Moody’s is the only major credit rating agency to still classify South Africa’s long-term foreign-currency debt as investment grade, though it has recently highlighted some concerns over the economic and fiscal outlooks.

Moody’s maintains a stable outlook for the rating but in October it cited a weaker fiscal outlook as a credit negative. This month, it said Africa’s most industrialised economy would recover slowly this year.

“I have not seen anything that is credit-negative that has developed since Moody’s last pronouncement on our credit rating,” Reserve Bank Governor Lesetja Kganyago told Reuters at the World Economic Forum in Davos, Switzerland.

“(Nothing) has developed that would lead us to say the following risks have materialised and as such the rating is at risk,” he added.

South African officials have been at pains to reassure investors in Davos that the economy has turned a corner after nine years of stagnation under former president Jacob Zuma.

Kganyago said on Friday he was open to staying on as Reserve Bank chief once his current term ends in November, but he stressed any decision to extend his appointment rested with President Cyril Ramaphosa.

He said South Africa’s inflation risks included oil prices and moves on global markets that could affect the rand.

“Domestically we will watch very closely what happens to unit labour costs and average wage settlements,” Kganyago said.

Data showed on Wednesday that December consumer inflation fell to 4.5%, the midpoint of the Reserve Bank’s target range of between 3 and 6%.

Kganyago said after a monetary policy meeting this month that risks to the inflation outlook were moderately on the upside, despite an improvement in near-term price pressures.