A junk downgrade could be the least of South Africa's problems

Jamie McKane

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A junk downgrade could be the least of South Africa's problems

As South Africa heads into a three-week lockdown that will shut down large parts of its already shrinking economy, a possible downgrade of its credit rating to “junk” on Friday could be the least of its problems.

Moody’s Investors Service is scheduled to make an announcement at the end of the week and while it could end up taking no action, 19 of 23 economists surveyed by Bloomberg expect a negative ratings move. According to 12 respondents, the country will be cut to junk, while seven expect it to be placed on ratings watch for a downgrade, two expect it to be affirmed at current levels and two expect no statement.

[Bloomberg]
 

Herr der Verboten

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A junk downgrade could be the least of South Africa's problems

As South Africa heads into a three-week lockdown that will shut down large parts of its already shrinking economy, a possible downgrade of its credit rating to “junk” on Friday could be the least of its problems.

Moody’s Investors Service is scheduled to make an announcement at the end of the week and while it could end up taking no action, 19 of 23 economists surveyed by Bloomberg expect a negative ratings move. According to 12 respondents, the country will be cut to junk, while seven expect it to be placed on ratings watch for a downgrade, two expect it to be affirmed at current levels and two expect no statement.

[Bloomberg]
Like doom, gloom and racism for breakfast?
 

Scooby_Doo

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In all reality, Africa will need help from the world. If the government has any sense, we will ask for an IMF bailout the second we get through the lock down.
 

surface

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Expert economists are always right so I am expecting no statement or a status quo.
19 of 23 economists surveyed by Bloomberg expect a negative ratings move.
 
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NarrowBandFtw

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no ratings agency will want to touch any of their ratings during all this market volatility, that might be the saving grace for ZA for the time being, it would not be perceived as "helpful" if they kick a country while the whole world is down

those sub-prime mortgage ratings back in 2008 were only adjusted AFTER the dust settled on the market crashes
 
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