Fitch affirms City of Joburg ratings

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IOL  Joburg skyline INDEPENDENT NEWSPAPERS Less than a week after the release of the national crime statistics highlighted an increase in violent crime in Gauteng, the province has set up a two-day Gauteng Safety Indaba to take a hard look at the problem. File photo: Karen Sandison

Johannesburg- The City of Johannesburg is financially stable, despite pressure from high unemployment and demographic growth, Fitch Ratings agency said on Friday.

It maintained the city's long-term local currency issuer default rating (IDR) at 'BBB' with a stable outlook, it said in a statement.

IDRs are used to indicate an entity's vulnerability to default on financial obligations.

A 'BBB' rating indicates that expectations of default risk are currently low.

Fitch said the ratings reflected the city's important status as South Africa's largest city, and its sound management with a fair degree of sophistication.

The metropolitan municipality had successfully tested access to capital markets and had a strong and stable financial profile, with sustainable debt and improved liquidity.

“The ratings also take into account an operating environment that is under pressure from high unemployment and strong demographic growth,” Fitch said.

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