South Africa Rand Slumps to Record Low After Moody’s Cut to Junk

South Africa’s rand weakened to a record low, dollar bonds plunged and banking stocks dropped after the country lost its last investment-grade credit rating. Investors anticipate it may slide even deeper into junk as the spread of the coronavirus hammers the economy, Bloomberg News reported. The currency dropped as much as 2.5% to 18.09 per dollar, breaching 18 for the first time. It traded 1.1% down at 17.82 by 12:46 p.m. in Johannesburg, still the worst performance among major emerging-market currencies after the Mexican peso. Yields on 10-year dollar-denominated bonds climbed 69 basis points to 8.13%, a record, and widening the premium over U.S. Treasuries to 735 points. Yields on 10-year government bonds opened 60 basis points higher, but erased the increase as additional liquidity measures announced by the country’s central bank over the weekend came into play. An index of South African bank stocks slid as much as 6.1%, extending Friday’s 12% slump. Read more