🔒 WORLDVIEW: Coronavirus & Moody’s – turning crisis into opportunity
From an SA perspective, the worst has happened. Not only is the country in lockdown as coronavirus spreads, but Moody’s has downgraded our debt to junk.
From an SA perspective, the worst has happened. Not only is the country in lockdown as coronavirus spreads, but Moody’s has downgraded our debt to junk.
What’s the cost of becoming junk? South Africa lost its last investment-grade rating late on Friday when Moody’s Investors Service cut it to Ba1.
South Africa’s National Treasury sees the downgrade of the country’s debt to junk by Moody’s Investors Service as an opportunity to fix the economy.
Moody’s heaped more pain on an economy already in recession and now staring down the barrel of a steep contraction over the global coronavirus pandemic.
Financial markets and the rand could be volatile as the news of a ratings downgrade is absorbed. The decision by Moody’s could not have come at a worse time.
If South Africa’s credit rating is downgraded by Moody’s, there are steps South Africans can take to ensure it will not affect their savings.
South Africa could lose its last investment-grade credit rating this week. Moody’s Investor Service is scheduled to release an assessment of the country on Friday.
SAA has been given access to R3.5bn from state-owned Development Bank of Southern Africa to avert the airline’s collapse and has immediately taken R2bn.
The FT describes South African’s sovereign debt rating as “hanging by a thread” as Moody’s is the only ratings agency that still has the country’s debt rating above junk.
Politicians soften harsh realities with pretty words. External agencies like the IMF aren’t bound by the same desire to shield us from difficult truths.