Moody's Investors Service has taken a dim view of South Africa's political shenanigans, and cut the country's credit rating late on Friday by one notch to Baa3, just above junk status, and assigned a negative outlook, news which hit the rand hard. The main points raised were that the country's institutional framework and governance had materially deteriorated and were expected to affect economic growth. S&P Global Ratings and Fitch have both downgraded South Africa's foreign currency debt to junk, while Fitch also downgraded the country's local currency debt to junk. In particular Moody's mentioned the cabinet reshuffle in March as posing a threat to GDP growth, and that uncertainty over policy priorities had damaged investor confidence. Moody's is also concerned about state-owned enterprises, which it says continue to pose a risk to the country's fiscal strength. "It is unlikely that a political consensus will emerge which supports investment in the economy and reinvigorates the re...

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