Moody’s decision not to junk SA’s credit ratings was widely expected and priced in. What was not anticipated was the validation it gave to President Cyril Ramaphosa’s reform efforts by changing SA’s credit outlook from negative to stable. The rand strengthened by 7c over the weekend to R11.67/$ as the market and investors welcomed the news. After 1994, Moody’s led the other main rating agencies on the way up. Now, having acknowledged that "SA’s economy has significant growth potential", it looks set to do so again. Fitch and S&P Global Ratings currently rank SA subinvestment grade, but Moody’s has confirmed SA’s ratings on Baa3, the last rung of the investment-grade ladder. In recent years, as the other main ratings agencies took the lead in downgrading SA, Moody’s was inclined to give the country the benefit of the doubt. It did so again in November, when S&P slashed SA’s ratings deeper into junk territory after the disastrous medium-term budget. Moody’s instead put SA on a 90-day ...

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