Washington — Reserve Bank governor Lesetja Kganyago said developing nations should be able to challenge ratings agencies’ methodologies to ensure greater transparency.
Speaking after the conclusion of the Group of 20 (G20) finance chiefs meetings in Washington, Kganyago said transparency in ratings could yield better outcomes for developing countries.
“If we are able to take their methodology and take the data they are using and see whether we are able to replicate it ... we can actually engage them and challenge them based on their methodology and say that your rating is wrong,” he said.
SA, which holds the G20 presidency until November, committed to address the elevated cost of capital for developing economies, which includes the role of ratings agencies.
However, the proposed commission to examine these concerns remains unestablished. The initiative, outlined in a policy priorities document at the start of SA’s presidency, sought to explore barriers to affordable and predictable capital flows for development, including those linked to ratings agencies’ methodologies.
During the fourth meeting under SA’s G20 presidency, finance ministers and central bank governors issued a chair summary instead of a formal communique, a recurring feature of multilateral discussions where consensus isn’t reached.
The summary highlighted global economic resilience but identified risks such as geopolitical tensions, supply chain disruptions, elevated debt levels, and severe weather events.
The statement emphasised the importance of dealing with excessive imbalances, particularly for developing economies.
“Given the challenges of high public debt and fiscal pressures, members acknowledged the importance of pursuing growth-orientated macroeconomic policies to enhance long-term growth potential,” the chair summary reads.
The group also addressed the unequal development of AI across developing nations, advancing discussions on innovation’s transformative potential. It underscored the need for reforms at multilateral development banks to expand lending capacity while amplifying developing countries’ influence in decision-making processes.
SA will hand the G20 presidency to the US in November.
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.