Higher Public Debt Threatens South Africa's Financial System, Central Bank Says

A massive increase in projected government debt poses a “major threat” to financial stability in South Africa, the central bank warned on Tuesday, while problem mortgages were also a risk, Reuters reported. South Africa’s government debt is now set to hit 82% of gross domestic product this year as the Treasury grapples with the impact of the COVID-19 pandemic. In its bi-annual review on the soundness of the financial system, the South African Reserve Bank (SARB) said this meant close links between the financial sector and government were now a serious worry. “The interconnectedness between the financial sector and the sovereign has emerged as a major threat to financial stability in South Africa,” the document said. Read more