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Johannesburg - The Cape Town municipality has received a short-term credit rating of P-1.za from international rating agency Moody's Investors Service.
Since May 2008 the city has had a long-term credit of Aa2.za, also issued by Moody's at that time.
Moody's says the rating takes into account the city's good budget performance and its comfortable liquidity position.
The agency expects the city's most important financial measures and budget position to remain healthy in the mid term, as long as they are supported by careful financial policies and a healthy, growing economy.
The rating also takes account of the fiscal pressure for service delivery and the implementation of the city's huge capital expenditure programme, the financing of which will considerably boost debt levels. At the end of June the municipality's net indebtedness was R5.8bn.
This is 35% of the expected operating income for the current financial year.
Cape Town is the second-largest city in the country, judging by its income of R17bn for last year, says Moody's.
It has 3.5 million inhabitants, representing 70% of the population of the Western Cape and 80% of the region's economic activity.
- Sake24