The ratings on the Republic of South Africa are supported by: Prudent fiscal policies. These are underpinned by budgetary and administrative reforms that have improved fiscal flexibility, thereby enabling the government to conduct more expansionary policies and allocate increased resources to social expenditure without reversing the downward trend in the public debt burden. A manageable and decreasing external debt burden, which has helped to weather the periodic South African rand crises. South Africa's democratic and transparent institutions, and the government's cautious and legalist approach to social reform. An independent central bank committed to low inflation. Well-developed domestic capital markets and a strong and well-regulated banking sector. The ratings on South Africa are constrained by: Modest external liquidity. Official reserves currently
