Credit ratings agency Moody’s Investors Service has cautioned that if the rand continues to weaken, SA may struggle to raise funds and service its foreign debt, although its vulnerability to tightening global financing conditions remains low. SA’s public debt has ballooned to more than 50% of GDP over the past decade and analysts are warning that the country is falling into a debt trap. “Tightening external conditions can affect the overall cost of debt for the government, both through the availability and cost of external finance and if currency pressure leads the South African Reserve Bank to raise policy rates significantly,” reads a report released by Moody’s senior credit officer, Lucie Villa, on Tuesday. The rand has depreciated 14% against the dollar during the second quarter, while portfolio outflows came to about $6.4bn, according to data Institute of International Finance (IFF) data. This has been in the context of the US trade wars, selling-off in emerging markets, portfo...

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