Cape Town - Fitch Ratings said on Monday it expected the performance of assets backing South African structured finance to remain stable despite last week's interest rate hike.
“Fitch consequently expects the South African structured finance transactions it rates to perform within base case assumptions,” the London-based ratings agency said.
“The recent interest rate increase of 50 basis points by the South African Reserve Bank was earlier than expected. However, Fitch believes that only substantial increases in the interest rate would have a meaningful impact on the performance of structured finance transactions.”
It warned that further, significant tightening of monetary policy, as a result of continued steep depreciation of the rand and inflationary pressures, may change the stable outlook for the sector.
The SA Reserve Bank raised its repo rate by half a percentage point to 5.5 percent last week.
Financial markets were expecting further hikes to fight inflation. - Sapa