Finance Minister Pravin Gordhan said on Monday that South Africa’s financial system remained strong, despite the global financial turmoil following the downgrade of the US credit rating and the ongoing European debt crisis.

Standard & Poor’s (S&P) downgraded the US credit rating late on Friday by one notch to ‘AA+’, removing the world's largest economy from the triple A-club for the first time since 1917, when the US won the top ranking.

Gordhan, South African Reserve Bank (SARB) governor Gill Marcus and members of the country’s financial stability oversight committee on Monday had discussions about the possible impact of the US credit rating downgrade and the ongoing sovereign debt concerns in Europe on South Africa’s financial stability.

The parties said in a joint statement that South Africa had “deep and liquid financial markets, which continued to function even during this difficult time of global financial turmoil”.

In fact, S&P revised South Africa’s rating outlook from negative to stable, affirming the country’s sovereign rating, the statement read.

All rating agencies rate South Africa at an investment grade.

“These ratings are a testimony to our sound management of the economy and public finances, and demonstrate confidence in our fiscal consolidation measures. Our financial system remains strong, with adequately capitalised financial institutions, supported by a robust regulatory framework,” said that statement.

The JSE fell by more than 2% on Monday, tracking weaker global markets, while the rand declined.

The National Treasury and SARB said that they would continue to actively monitor the situation to mitigate any financial stability risks and any adverse short-term and long-term effects on the broader economy.

The institutions remained confident in South Africa’s growth forecast and fiscal projections outlined at the time of the Budget in February.