A year before we eventually got junked I had an interview with SABC journalist Francis Herd about a looming rating decision by Moody’s, which was then the last ratings agency that had SA on investment grade. On live television I took a bet with her that nothing would happen to bond yields or the rand if we got junked. There would be a reaction on debt and currency markets for a week or two, after which everything would return to normal because traders had long priced in the likelihood of a downgrade.

I said the cost of capital and the currency could even improve after the event. That is what had actually happened in Brazil and Russia, according to research by Old Mutual economist Dave Mohr. The Reserve Bank could also intervene and buy government bonds to stabilise the market. I also pointed out that the expected outflow of R100bn after SA’s exit from the World Government Bond index (WGBI) should be seen within the context of average daily turnover on the various currency mark...

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