Rand under pressure as Mboweni says Moody’s rating ‘not looking good’

[Jopie Fourie]

The rand weakened as much as 1.2% against the dollar after Finance Minister Tito Mboweni said on Thursday afternoon that the fate of the country’s sole remaining investment-grade credit rating from Moody’s Investors Service was “not looking good.”

The currency pared its losses to be 0.8% weaker at R15.07/$ as of 17:00 in Johannesburg. The rand slumped as much as 3.3% Wednesday after Mboweni presented his medium-term budget policy statement. Yields on 2026 government rand bonds climbed 15 basis points to 8.59% after soaring 23 basis points yesterday.

Rand under pressure as Mboweni says Moody’s rating ‘not looking good’ | Fin24

Moody’s is scheduled to assess South Africa’s rating on Friday.

m.fin24.com

 

[Jopie Fourie]

Good. Hopefully Moody's come to their senses and downgrade SA to junk status. They need to protect the little they have left of their reputation.

 

[lived666]

phew bought my Shekels just in time last week

 

[Mephisto_Helix]

Jirre it's in a freefall again ….. good luck on the price of everything going up badly folks

 

[santaman202]

"Let the rand fall, we will pick it up."- Minister Nomvula Mokonyane (4 April 2017)

 

[3WA]

Good. Hopefully Moody's come to their senses and downgrade SA to junk status. They need to protect the little they have left of their reputation.

A very wise MYBB member told me it doesn’t even matter whether Moody's does it or not since noone respects them anyways.

 

[NarrowBandFtw]

Translation: look we paid the monthly bribe, but those SWIFT transfers take time and we don't know if the bribe money will reflect in Moody's account by the time they make an announcement on our "rating"

 

[ɹǝuuᴉM]

On occasion I wonder if South Africa was not better off with Zuma than Ramaphosa. Better the Orc you know than the Orc you don't know.

 

[R13...]

On occasion I wonder if South Africa was not better off with Zuma than Ramaphosa. Better the Orc you know than the Orc you don't know.

Why? Are you anxious they might hold off on the downgrade? So you'd have preferred Zuma and know for sure we'd be junk two years ago already?
Why are you taking so much interest in this country if you're a supposed "foreigner"?

 

[Candystore]

Does anyone kow at what time the announcement will be made?

 

[Johnatan56]

Good. Hopefully Moody's come to their senses and downgrade SA to junk status. They need to protect the little they have left of their reputation.

While living and having assets in south Africa for another year or so, I seriously hope not.

 

[SoldierMan]

These ratings agencies are a bunch of idiots really. Just before the 2008 collapse they gave Lehman Brothers a very high rating...... We all know what happened next.

 

[Candystore]

These ratings agencies are a bunch of idiots really. Just before the 2008 collapse they gave Lehman Brothers a very high rating...... We all know what happened next.

It doesn't matter. Once you are rated junk, imagine what investors will do - or not do.

 

[SaiyanZ]

Why? Are you anxious they might hold off on the downgrade? So you'd have preferred Zuma and know for sure we'd be junk two years ago already?
Why are you taking so much interest in this country if you're a supposed "foreigner"?

I think it's because Cyril seems to be pushing socialist things like BEE/transformation, NHI, and EWC much more than Zuma ever did and he might actually be able to action some of these things (being smarter than Zuma) and wreck the country even more. Whereas you knew that Zuma would always just be a leech who would never accomplish anything.

Think about how much Zuma cost us vs how much NHI and EWC would cost us.

 

[R13...]

I think it's because Cyril seems to be pushing socialist things like BEE/transformation, NHI, and EWC much more than Zuma ever did and he might actually be able to action some of these things (being smarter than Zuma) and wreck the country even more. Whereas you knew that Zuma would always just be a leech who would never accomplish anything.

Think about how much Zuma cost us vs how much NHI and EWC would cost us.

If NDZ was elected she'd have signed off on a R1trn nuclear build program, which was Zuma's pet project just before he was recalled and he tried to buy time to push it through. Such a commitment would have made NHI/EWC look like a walk in the park.

 

[Bewlen]

These ratings agencies are a bunch of idiots really. Just before the 2008 collapse they gave Lehman Brothers a very high rating...... We all know what happened next.

Would you say that SA is worthy of foreign investment, fiscally responsible and with a bright outlook? If you can agree to the above, I would have to agree with you. If you cannot - and therefore admit that they are correct in their analysis - what is the point you are trying to make?

Of course they messed up big time in the 2008 scenario. They were wrong with catastrophic consequences for the entire world. But I don't think they are wrong in our case. If anything, they are bending over backwards for us.

 

[SoldierMan]

It doesn't matter. Once you are rated junk, imagine what investors will do - or not do.

True. Another downgrade and we will really be in the crapper. Not that investment is rolling in right now anyway.....

 

[SoldierMan]

Would you say that SA is worthy of foreign investment, fiscally responsible and with a bright outlook? If you can agree to the above, I would have to agree with you. If you cannot - and therefore admit that they are correct in their analysis - what is the point you are trying to make?

Of course they messed up big time in the 2008 scenario. They were wrong with catastrophic consequences for the entire world. But I don't think they are wrong in our case. If anything, they are bending over backwards for us.

See my post above. I just think it's a bit hit and miss with these rating agencies. But yeah in the case of SA they have got it right. If I was an overseas investor looking for potential, sadly SA wouldn't be high on the list.

 

[The Trutherizer]

On occasion I wonder if South Africa was not better off with Zuma than Ramaphosa. Better the Orc you know than the Orc you don't know.

Nah... Once you get through the BS, maybe there's a chance to get to a point where the Rand can gradually start reflecting it's real value again. Which is way better than the official exchange rate indicates.
The Rand only needs to get out of the volatile trading situation it finds itself in to gradually get back to reality. And that volatility was by and large created by Zuma making sure he says something dumb every 3-4 months. Almost regular as clockwork. Often accompanied by rumors that the Guptas or some other connected persons made a killing on Forex trading. The Rand is one of the most heavily traded 3rd world currencies in the world for a reason.
Of course there is always the chance that this current administration plans to keep on with that pattern for some devious reason. It will be telling to see if they push stability or volatility.
I wouldn't hold my breath of course, the ANC has seemed dead set against encouraging imports for the most part in the past, but the way Zuma kicked the Rand around all the time... nope.

 

[BBSA]

Most investors already know we are junk, it is already priced into our currency and bonds.