The rand slipped slightly on Thursday morning, a day after the budget, which may have bought SA enough time to dodge another credit-rating downgrade bullet. Markets cheered in the in immediate aftermath of the budget, which Finance Minister Malusi Gigaba tabled in Parliament on Wednesday. As predicted, Gigaba announced deep cuts in public spending, as well as increases in personal income taxes and value added tax to stabilise to the country’s finances. But not everyone was as convinced, with ETM Analytics economist George Glynos tweeting: "Budget score: 3/10. More of the same as SA heads closer to fiscal cliff, downgrade guaranteed." Moody’s will release the results of its ratings review soon, which could still upset the apple cart. Should Moody’s downgrade SA’s credit rating to subinvestment grade, local bonds will fall off international bond indices, prompting automatic selling by institutional investors.
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