Rand gains 5% against dollar, but rally may be ‘blinding traders’ to risks
The rand ‘has gained 5% against the dollar this month, the most out of more than 140 currencies tracked by Bloomberg’, writes Colleen Goko.
The rand ‘has gained 5% against the dollar this month, the most out of more than 140 currencies tracked by Bloomberg’, writes Colleen Goko.
South Africa not only won the Rugby World Cup in a convincing way on Saturday by beating England by 32-12; the Springboks also claimed the Team of the Year award in a ceremony in Tokyo last night.
Moody’s changed outlook on SA’s ratings to negative from stable and affirmed the Baa3 long-term foreign-currency and local-currency issuer ratings.
South Africa’s decision to more than double its financial support for Eskom is “credit negative” for the sovereign rating as it’s an additional drain on the budget.
South Africa may struggle to hang on to its sole investment-grade credit rating if economic growth persists at weak levels and if government debt and risk from state-owned companies rises, Moody’s Investors Service said.
Failures at Eskom’s ageing power stations and technical problems at newer plants have led to debilitating blackouts.
South Africa’s debt-laden power utility raced to stabilise the grid this week by resorting to the most intense supply cuts in four years.
Eskom, which intensified supply cuts that threaten businesses Monday, continues to represent a significant risk to the country’s finances, Moody’s Investors Service said.
South Africa’s government is prioritising regaining an investment grade rating on its debt as part of its plans to revive a stagnant economy, Finance Minister Tito Mboweni said.
Moody’s Investors Service confirmed the long-term issuer and senior unsecured ratings of the Government of South Africa at Baa3, as well as the (P)Baa3 senior unsecured shelf and senior unsecured MTN program ratings. The outlook was changed to stable.