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Moody’s Postpone Review
Rating Agency Moody’s has once again pushed back making a call on South Africa’s credit rating (which currently sits just above “junk” status at BAA3). The agency was expected to release a reviewed rating this month but have decided to hold off till later in the year.
This will allow certain local events to take place such as the coming elections in May 2019 before they make a call. It will also give them time to see what happens with Eskom and the local GDP and inflation. They have indicated that, at present, the country’s situation is much like that of other BAA3 rated countries. This is why there last rating came with a “stable outlook” which means they expect little to change for the better or worse in the months ahead.
‘at present, the country’s situation is much like that of other BAA3 rated countries’
If towards the end of the year the rating does drop, as many expect, it will see Billions of rand being pulled from the country and foreign investment becoming less likely than ever.
After Moody’s made the announcement that they would not be giving a new review this month the Rand briefly went up to a one month high vs the US Dollar before settling.
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