South African banks have had their credit ratings downgraded. At first glance it is easy to think this doesn't affect us much, but I've just discovered the effects are very real and personal.
Standard & Poor's cut the outlook for South African ratings to negative from stable on Tuesday on concerns about a large current account deficit and slowing world growth.

The revision follows a similar move by Fitch on Monday, which was criticised by the country's Treasury.

"The outlook revision reflects pressures on South Africa's balance of payments, which increase the risk of further currency depreciation and a sharper-than-anticipated correction in the current account deficit," S&P credit analyst Remy Walters said in a statement.

The ratings agency affirmed South Africa's "BBB+/A-2" foreign currency and "A+/A-1" local currency ratings.

It said local banks had limited exposure to the global financial crisis and should cope with an increase in bad debts as households struggle to cope with high interest rates and inflation.

But the economy would feel the impact of the global slowdown.

The rand had depreciated sharply this year and net portfolio flows were likely to remain negative, putting further pressure on the currency.

This would add to inflationary pressures and delay an expected easing in monetary policy at a time when economic growth was easing, S&P said.

The rand has weakened by around 30% against the dollar in 2008.
full story from M&G here
I've just had the pleasure of negotiating the finance on a few new vehicles. Deal approved - no problems there - but the issue (as per normal) is the rate. I'm used to the consultant being quite cheerful - this time the consultant sounded nothing less than embarrassed. The best she could do was a rate 1% higher than my last deal. Most apologetic, but the bank is having to deal with losses incurred elsewhere.

My comment that I was not responsible for any of those losses didn't move the argument an inch. Obviously these losses are real, and clearly they can only be recovered from people who do tend to pay their bills.

I feel so naive at times. All I thought that counted was my personal credit rating and that of my business endeavours.