Improved credit ratings help to lower interest rates
· The South African
Credit rating changes have real world consequences for South Africans as an upgrade means that the South African government and South African financial institutions are more credit worthy and can then help to lower interest rates.
That means that they can issue bonds at lower yields, which results in these financial institutions being able to offer lower interest rates to their customers.
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Rand impact
As South African government and corporate bonds are now more credit worthy, this encourages foreign investors to buy more of these assets. As the demand for the South African rand increases, so the value of the rand strengthens. This then lowers the cost of imports, which leads to lower inflation.
Rand graph is sourced from data of the South African Reserve BankNovember 2025
International credit ratings agency S&P Global upgraded South Africa’s credit rating to BB on 14 November. This was the first upgrade for South Africa by a credit rating agency in over 16 years.
February 2026 Update
On 20 February 2026, S&P Global said the year 2025 started with five sovereigns on positive outlooks. Four (Morocco, Egypt, South Africa, and Togo) upgrades followed, with Benin being the exception. The upgrades led directly or indirectly to similar positive rating actions across the financial and corporate sectors that S&P Global cover in Egypt, Morocco, and South Africa.
Precious metal price impact
As gold and platinum prices reached record highs in January 2026, S&P noted that this would have a positive impact on the government’s revenue. It said the improving tax collections and expenditure controls, should result in fiscal consolidation continuing through to 2028. Already in December 2025, impact of higher precious metal prices was being felt as revenue jumped by 13.9% year on year.
Gold graph is sourced from data of Statistics South Africa25 March Budget
As S&P have South Africa on a positive outlook, meaning they could upgrade South Africa even further in 2026, the 25 March Budget will be crucial in maintaining a positive trajectory. Economists expect Treasury to announce the third consecutive primary fiscal surplus for the fiscal year 2025/26.
A primary surplus is when revenue exceeds non-interest expenditure. If this maintained over time, then the government debt will be reduced, so allowing even more interest rate reductions, as the government cuts its call on the available savings pool.