Brics rat­ings agency a pipe dream

CityPress - - Business -

Plans by the five-na­tion group of de­vel­op­ing coun­tries – namely Brazil, Rus­sia, In­dia, China and South Africa (Brics) – to form their own credit rat­ings agency, aimed at chal­leng­ing dom­i­nant Western agen­cies Fitch, Moody’s and S&P Global, would be a ”waste of time”, said Trea­sury’s di­rec­tor­gen­eral, Lungisa Fuzile.

He added that these plans, an­nounced by Brics mem­bers in Oc­to­ber, were mooted for political rea­sons as they had ex­pressed the be­lief that Western agen­cies favoured de­vel­oped economies.

Si­bongiseni Mbatha, head of the As­so­ci­a­tion of Black Se­cu­ri­ties and In­vest­ment Pro­fes­sion­als, said Brics would chal­lenge the ex­ist­ing rat­ing sys­tem by hav­ing prospec­tive in­vestors pay for the rat­ing of an is­sue of a debt in­stru­ment.

“In prepa­ra­tion for the Brics agency, Exim Bank [an In­dian bank] has pre­pared a pro­posal and rat­ings agency Crisil has con­ducted a study for In­dia,” he said.

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