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Gigaba’s diaries: Moody’s prepared to wait and see

Gives vital reprieve following meeting with finance minister and Reserve Bank governor.

While the new finance minister’s engagement with key global financial institutions got underway on Thursday, in Washington DC, with a number of meetings with the World Bank and International Monetary Fund (IMF), all eyes were on the meeting with Moody’s Investor Services early Friday morning. 

Moody’s was always going to be the big one, as any decision to downgrade South Africa’s local currency rating to below investment grade would have huge implications for the flow of global capital to the country. With Fitch already having downgraded the country’s local currency to “junk”, a downgrade from another one of the Big 3 would entail forced selling on behalf of bond portfolios tracking key global government bond indices.

Feedback from the meeting, in which South African Reserve Bank governor Lesetja Kganyago was also present, seems to be that Moody’s wanted assurances over reforms that would deliver economic growth, contain government spending and reduce borrowing, as well as the timing and scale of nuclear procurement. 

Minister Gigaba reiterated the Treasury’s commitment to prudent fiscal discipline as part of government policy and promised substantive reforms to the governance of State-owned entities was a top priority.

Unlike Fitch and Standard & Poor’s that chose to downgrade the country in the aftermath of the cabinet reshuffle, it appears Moody’s will take a wait-and-see position, giving the minister as much as three months to enact changes before publishing any decision, said an official who attended the meeting. 

While this may be a temporary reprieve, time is of the essence. 

The minister is scheduled to meet with IMF chief Christine Lagarde on Sunday.

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Oh dear Malusi Gigupta. You best come home now from the USA, tell everyone you have been recalled and not expelled by the investors, so you can tell your boss that he has messed up big time and you have messed in your pants and have to get back quickly before the Western Capitalists throw you out. But you are always welcome in Russia, Brazil and India – if they have any faith in you. We in South Africa don’t. Christine Lagarde has also come across the likes of unimportant people representing unimportant countries before. And thanks to Mr. Zupta, we are now an unimportant financial destination in the world these days.

As far as Moody’s is concerned, despite their 3 m month possible brake on downgrading South Africa, they are going to show you personally, a toffee. A well deserved one. Get your speech ready to explain the Moody’s downgrade when it comes so you won’t be caught short. And remember to vote in favour of getting rid of the present president when the vote occurs in the foreseeable future.

Just as SA had the chance to prove and bypass “junk” in three previous occasions, and deliver on our fiscal policies, and proof our government, country and abilities to actually deliver on good governance and growth. What did the ANZ783 government proof, they can not be trusted, they proof that the only agenda is “r@dical transformation”(witch has not worked in any country, ever), on all fronts – land, jobs, JSE and the economy.

That personal gain to ANC is bigger than country, and “if the Rand fall, just pick it up”, jep, that’s what “junkies” do, they scavenge the pavements and rubble for lost change.

Just as Gigaba told Christopher Malikane to keep his mouth shut, meaning “do not let the cat out”, even Moody’s will see the picture soon enough, and downgrade. In interviews I saw of Gigaba, unfortunately he don’t has the leadership, personality or persuasion capabilities to show that he is a man that can handle this enormous task and budget.

This is just a cat and mouse game, with “window-dressing” to the world, as to what is government plan. Unfortunately the rest of the world is also up to date on what is gong on in SA, and for the rest of the world governance is based on proof and not promises. Just as @Sweetpea state, we need a regime chance to safe SA.

So in other words, their hammer will fall three months from now.

I suppose it gives us three months to save our money if we can.

That is all they wanted, time. Time to steal and sign the Nuclear Deal.

Well done.

Impressive and pro active efficiency shown by Gigaba, to rise to the occasion.

I saw a CNN interview with him yesterday, and the line of questioning directed to him is a shocking reminder of how uninformed the world really is on the true power of S.A’s economy.

Anyone willing to check the facts on the spheres of government and its influence, would have known that the South African President’s powers is extremely limited by the Constitution.

Same goes for private property rights and ownership, rendering the whole “nationalisation debate” as futile as Zuma himself.

Fitch, S&P and many international business editorials should be red faced over their ignorance (or just lack of interest) in this issue.

Moody’s also seems to have made up their minds NOT to downgrade, a while ago, as Wall Street has far more to lose from a downgrade than S.A does.
International divestment is also out of the question, because Africa is the last remaining market, and S.A is the only serious economic platform to do this from.

The S.A economy’s fate has never been in Zuma’s hands, but rather the iternational emerging market capitalisation trand. Willing or unwilling, the world needs a first world financial sector in Africa to be the switching house for the continent, and we are and have been the selected beach head for this for years now.

Despite his best efforts, it seems Zuma has a hard time appointing lackey’s in Treasury… (how useless are you if you can’t even screw something up properly?)

would have loved to have seen the CNN interview. Hope he is able to stand up to Zuma and Guptas, but don’t blame us for lack of immediate trust in him – he has after all appointed the most unusual adviser to his team…..

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