Moody's acts swiftly to put SA on downgrade review
The ratings agency says the abrupt change in leadership could have an immediate impact on economic growth and public debt levels
Just hours after rating agency S&P Global downgraded SA’s foreign currency rating to junk status, rival Moody’s put SA on review for a downgrade in a move that suggests it will cut its rating sooner rather than later, possibly by more than one notch. Moody’s rating on SA is two notches into the investment grade scale, so a one notch downgrade would still leave it investment grade, but some expect that it might opt for two notches when it publishes a scheduled statement on Friday this week. Moody’s said its decision to put the rating on review was prompted by the abrupt change in leadership of key government insitutions, which raised questions about progress on essential reforms and about the effectiveness of SA’s policymaking institutions. Given its potentially negative impact on fragile domestic and external investor confidence, the change in leadership could also have immediate implications for growth and public debt levels, Moody’s said. The review will assess the likelihood of c...
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