WATCH: SA downgrade - it could have been worse | Fin24
 
In partnership with
  • Data Market Inquiry

    MTN says it is prepared to defend itself before Competition Tribunal over report.

  • Claims of sabotage

    What we know so far about allegations of sabotage at an Eskom power station.

  • Dudu Myeni

    Court dismisses former SAA chiar's bid to have Outa withdraw from delinquency case.

Loading...

WATCH: SA downgrade - it could have been worse

Nov 30 2017 14:16
Moeshfieka Botha

Cape Town - Raenette Taljaard, the Executive Director of Economic Research Southern Africa, says while rating downgrades are never positive, SA was given a "stay of execution" on Friday. 

This is because Moody's, one of the big three ratings agencies, did not downgrade SA's sovereign debt, choosing rather to put it on review for downgrade. 

"No rating downgrade is a positive development whether you are Argentina, South Africa, Brazil, or Russia,” says Taljaard.

“I think that in some aspects it could have been worse if we had exited the World Bond Index, which we did not do courtesy of Moody’s reserving, in essence, their position until they see the budget in 2018. So even though the consequences were devastating, in principle it could have been even worse.”

Late on Friday evening S&P downgraded South Africa's long-term local currency rating to "BB+" - or junk - with a stable outlook, while rival ratings agency Moody's placed the country on review to be downgraded.

READ: S&P Global downgrades SA to junk, Moody's places SA on downgrade review

Last week Thursday Fitch had affirmed SA's long-term foreign and local currency debt ratings at junk with a stable outlook.

This means that, of the three major ratings agencies, only Moody's has kept SA's sovereign debt at investment grade.

“So we have  in essence a bit of a stay of execution to see what happens in the budget next year, and that is where the pressure points will really coalesce," she says. 



* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

fitch  |  s&p global  |  moody's  |  downgrade
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Voting Booth

How concerned are you about ransomware attacks?

Previous results · Suggest a vote

Loading...