Moody’s keeps South Africa rating untouched
INTERNATIONAL credit rating firm Moody’s has left South Africa’s sovereign debt grading unchanged two notches above junk status, but warned that the country is not yet out of the woods.
Moody’s still rates Africa’s most developed economy as Baa2 – meaning it is of investment grade for banks – albeit with a negative outlook.
Instead of the much anticipated formal review of South Africa’s credit rating, Moody’s issued an updated credit opinion overnight, warning that the negative outlook remained because of political tensions and weak growth.
“The negative outlook on South Africa’s Baa2 government bond rating reflects risks related to the implementation of structural reforms aimed at restoring confidence and encouraging investment,” it said in a statement.
Moody’s warned that South Africa’s rating “would likely be downgraded in the absence of fundamental structural reforms supporting higher and sustainable medium term growth”. –