Credit rating firm S&P Global warned South Africa on Tuesday that its rating could be cut deeper into junk territory if the government meddles with the "critical" independence of the country's central bank.
A row over the South African Reserve Bank has escalated this week after the head of the country's constitutionally-mandated antigraft watchdog called for the bank to focus on growth more than maintaining currency and price stability.
"We would consider it critical that the operational independence of the reserve bank remains untouched lest we would see weakening policy flexibility in monetary affairs," S&P's top sovereign analyst, Moritz Kraemer, told the Reuters Global Markets Forum chatroom.
"Depending on the severity of the changes (to the central bank's independence), a rating action could indeed be one consequence."
S&P stripped South Africa of its coveted investment grade rating back in April after the sacking of internationally respected finance minister Pravin Gordhan. It currently has a BB+ rating with a negative outlook.
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