S Africa criticizes Moody's downgrade

JOHANNESBURG - South African Finance Minister Pravin Gordhan on Thursday criticized the world-famous credit rating agency Moody's for downgrading its financial institutions.  

"We disagree with the assessment of our banks, and they are not giving enough credit for managing the country's economy," said the minister at the launch of the Black Business Council near Johannesburg.

The minister said some rating agencies have drawn strong criticism for their "inadequacies" since the global economic meltdown in 2008, and "they want to paint us with the same brush now."

On Wednesday, Moody's Investors Service downgraded by one notch the senior debt and deposit ratings of five famous banks of the South African banking sector, including Standard Bank of South Africa, Absa Bank, FirstRand, Nedbank and Investec.

"We have an excellent credit record, and this year's general debt of the government is about 39 percent, well below the median of 44 percent. We are doing well, compared to our peers," said the minister.

"The rating agency should read the South African government's national budget which reached over one trillion rands (about $137.20 billion) for the first time in the history of the budget," Gordhan complained.

As the central bank of South Africa, the South African Reserve Bank said those downgraded banks had weathered the global financial crisis well, with no exposures to the Sovereign debt crisis of some trouble European countries. They are sound, well capitalized, providing investors with acceptable returns.