The SARB’s latest Financial Stability Review shows there has been progress made.
We are seeing improved financial conditions due to an orderly general election, political stability from the so called Government of National Unity, better electricity supply, and a more favourable credit rating outlook. But lingering risks threaten these recent gains, including things like escalating global conflicts, rising public debt, household financial distress, and yes, the challenges of remaining on the grey list.
Grey listing itself brings significant risks, such as strained relationships with international banks increased compliance costs, and reduced access to global financial systems. Nobody likes to do extra work or be dealing with shady institutions.
Prolonged grey listing could also mess with South Africa’s ability to hedge interest rate and foreign exchange risks, further complicating things economically.