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