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Johannesburg - There is no compelling evidence that circumstances in Zimbabwe currently pose a threat to financial stability in South Africa, the SA Reserve Bank (SARB) said on Thursday.
Releasing the September 2007 edition of the Financial Stability Review, the SARB said currently the potential for negative news from Zimbabwe to affect investor sentiment towards South Africa is small, as investors increasingly differentiate political risk between the two countries.
Furthermore, SA companies operating in Zimbabwe have taken steps to minimise the adverse financial impact of conditions in Zimbabwe.
These actions have included either "writing off" their stake in Zimbabwe or reducing their investment to a minimum. Many of these companies have, however, opted to keep a foothold in Zimbabwe to be poised for an economic recovery.
The SARB added that the political and economic status of Zimbabwe has been receiving increasing attention both internationally and domestically.
The SARB noted: "The impact of conditions in Zimbabwe on South Africa could escalate as the situation deteriorates and solutions become harder to find.
"Although the Bretton Woods Institutions and some first world economies have spoken out against the Zimbabwean government and demanded support for the reforms they propose, the motivation for SA to change its approach of 'quiet diplomacy' is currently more likely to be motivated by the growing humanitarian crisis in Zimbabwe than by the stability impact on South Africa."
- I-Net Bridge