Parliament - The arms deal should not impact on South Africa's credit rating or affect its ability to attract international finance, Finance Minister Trevor Manuel said on Wednesday.

Replying to questions in the National Assembly, he said the world accepted that due processes were followed in setting up and negotiating the deal.

The government had included all financing issues relating to the deal in its published budget deficit forecasts, while South Africa's spending on  defence - less than 2% of gross domestic product - placed the country among the lowest arms spenders in the world.

However, statements by members of Parliament questioning the fundamentals of the decision to buy arms, and "silly" financing decisions - such as hedging - would taint its image internationally.

Government had taken account of all possible macro-economic issues inked to the arms procurement programme.

Manuel said government had chosen not to hedge against the future exchange rate risks associated with the costs of the deal.

Hedging would have affected the country's debt levels, and led to higher domestic interest rates.

It would also have sent a very negative signal to the market.

Manuel said it should be remembered that Parliament approved the Defence Review, recommending the arms purchases, following an extensive due process.

All political parties in the National Assembly had supported the decision, he said.

The Institute for Democracy in South Africa (Idasa) on Tuesday questioned this "myth", saying the review did not motivate for an increase in defence spending.

Releasing an interim report on the arms deal in Cape Town, Idasa political analyst Richard Calland said the myth that Parliament had approved the deal was used repeatedly by those wishing to defend the deal, but it was "not necessarily as clear-cut as this".

With acknowledgement to News24.