SA received a reprieve from Moody’s on Friday night, with the agency remaining the most generous of the big three credit rating agencies in being the only one to still rate both foreign- and local-currency South African government bonds as “investment grade”. As expected, Moody’s placed SA’s rating on review for a downgrade. Moody’s maintained its sovereign rating for SA at Baa3, which equates to BBB- in S&P’s and Fitch’s nomenclature. This is one rung above junk status. Moody’s added that the review would leave room for it to assess the government’s willingness and ability to respond to these rising pressures through growth-supportive fiscal adjustments that raise revenues and contain expenditures; structural economic reforms that eased domestic bottlenecks to growth; and improvements to state-owned companies’ governance that contained contingent liabilities. The review period is expected to conclude by the 2018 budget in February. “This will also allow Moody's to assess the policy...
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