South Africa: Rating downgrade – MUFG

Moody’s  decided to strip South Africa of its last remaining investment grade rating, which had become almost inevitable and it was always more a matter of timing, according to analysts at MUFG Bank.

Key quotes  

“The rand has been hit hard by the announcement from Moody’s that it has finally decided to strip South Africa of its last remaining investment grade rating.” 

“Moody’s noted that the key driver behind the rating downgrade was the continuing deterioration in fiscal strength and structurally very weak growth.” 

“South Africa’s economy had already fallen back into recession prior to the negative COVID-19 shock that will now make it both deeper and longer.”