Rand Slips After Moody’s Affirms South Africa Ba2 Rating with Stable Outlook
Quidah is an online platform that connects investors with curated opportunities and expert insights on Africa’s emerging markets, while offering businesses promotional services, partnership facilitation, and market intelligence to attract capital and grow their operations.
Industries
The South African rand traded lower on Monday after Moody’s Ratings affirmed the country’s Ba2 sovereign credit rating with a stable outlook, a decision that tempered expectations ahead of data releases expected to clarify fourth-quarter demand and output trends.
By 12:52 GMT, the rand stood at 16.97 per dollar, 0.2% weaker than Friday’s close. Moody’s cited South Africa’s low growth potential and a high but stable debt burden as key factors behind the rating affirmation.
The stable outlook reflects expectations that economic growth will improve modestly while the government’s debt burden remains elevated but steady over the medium term, Moody’s stated.
Nedbank economists had anticipated at least a revision to positive outlook from stable, pointing to improved fiscal discipline and trade performance, particularly after S&P Global Ratings upgraded South Africa’s foreign-currency rating to BB with positive outlook on November 14.
Investors now await retail sales, mining production and manufacturing data later this week alongside the U.S. Federal Reserve’s interest rate decision. On the Johannesburg Stock Exchange, the Top-40 index fell 1% while the yield on South Africa’s benchmark 2035 government bond held steady at 8.41%.
