The rand crept weaker on Friday morning, but held within its recent range, just hours before Moody’s and SP Global Ratings deliver their long-awaited reviews on SA’s debt rating. It remains unclear whether the two agencies will downgrade SA’s crucial rand-denominated debt and, more importantly, how the markets will react to the decision. The rand and local bonds could be the immediate casualties if the two rating companies pull the trigger on the local-currency debt rating. By some accounts, billions of rand could flow out of local bond market. But some argue that the markets, which tend to be forward looking, have positioned themselves according to that probability.
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