Azar Jammine: S&P switch to “negative” a red flag for SA interest rates

Friday's report from ratings agency S&P switched its outlook on South Africa from "neutral" to "negative" – signalling another credit downgrade is on that cards. That would take the country's sovereign debt rating to three notches below the all-important Investment Grade level. Most analysts are focusing on another of the Big Three ratings agencies Moody's whose analysts still have SA debt at Investment Grade. But that's a mistake, says respected economist Azar Jammine, who in an interview on Rational Radio this week warned about the consequences. As there is a correlation between lower ratings and higher interest rates – and regardless of what Moody's decides, if S&P were to downgrade SA once again, it would have a major impact on the overall cost of servicing the country's debt. Jammine says a rabbit is desperately needed to be pulled from SA's hat… – Alec Hogg

A warm welcome to Dr Azar Jammine chief economist at Econometrix, I know you've been on holiday, but you always follow these things closely. On Friday, the S&P's report came out on South Africa's rating, it's been viewed in quite a negative light by most people in the country what's your thoughts on what you read?

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