The rand fell 27c to the dollar within minutes of the announcement on Friday that S&P Global Ratings had downgraded the country’s local currency debt to subinvestment grade. The ratings agency sent out a stark warning to government to get its house in order, with state-owned companies the biggest contributor to the downgrade. Moody’s, which also released the result of its latest review on the country on Friday, did not downgrade the country but placed it on review for a downgrade, which will probably come in February after the budget speech. Moody’s said that if the February budget didn’t return the country to a path of fiscal consolidation, a downgrade was likely. "It remains unclear what assurance should be taken from the government’s stated commitment to reduce the funding gap." It said, however, it recognised that fiscal consolidation would be increasingly challenging without revived growth. At 12.32am the rand was at R14.15 to the dollar from Thursday’s R13.88.

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00. Got a subscription voucher? Redeem it now