South Africa Continues to Dodge the Moody’s Downgrade Bullet

Investors may be forgiven for wondering what’s taking Moody’s Investors Service so long to downgrade South Africa to junk, Bloomberg News reported. Financial markets have been pricing in a downgrade for months, and the two other major rating companies have had South Africa on junk for two years. Yet Moody’s said this week South Africa’s investment rating is probably safe for another 12 to 18 months and President Cyril Ramaphosa’s government needs time to implement economic reforms, including fixing the loss-making power utility Eskom Holdings SOC Ltd. “Moody’s continues to give the Ramaphosa government the benefit of the doubt,” said Jakob Christensen, a Copenhagen-based economist at Danske Bank A/S. Read more