SA finance minister seeks to reassure markets after credit rating downgrade

South Africa’s new Finance Minister Malusi Gigaba said on Tuesday the credit rating downgrade by S&P meant the government had to pay even greater focus on growing the economy, and that he would address the issues raised by the rating agencies.

Gigaba said South Africa’s rand denominated debt was still rated as investment grade and that the government’s fiscal policy remained unchanged despite the switch in finance ministers following the reshuffle last week.

“I’m not saying it’s easy to recover from degradation, but I think we can manage the political risks and practices that have been highlighted by S & P and have also been pointed at by Moody’s,” Gigaba said during a press briefing in Pretoria.

S&P cut the country’s credit rating to BB+ with a negative outlook from BBB- in an unscheduled review, saying the dismissal of respected Pravin Gordhan as finance minister raised the risk a damaging policy shift.

Meanwhile, Moody’s agency, which currently ranks South Africa, two notches above junk status, announced on Monday that it will place the country under surveillance for a potential downgrade.