Domino effect of a downgrade will be much worse than many expect
A chain of consequences has not yet been priced in by optimists, who fail to see how SOEs and other institutions will buckle
20 February 2020 - 16:46
The deteriorating creditworthiness of the sovereign has already done damage to the economy. And the further the country slips down the rating scale, the more dire the degree.
Just eight years ago SA had a solid investment credit rating of BBB+. Today, however, two of the three main ratings agencies — S&P Global Ratings and Fitch — rate the sovereign’s local currency debt at subinvestment, or speculative, grade (BB+). Moody’s Investors Service is likely to make this a humbling hat-trick in 2020...
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