SA likely to keep its investment grade status from Moody’s

The ratings agency says it probably won't make a move if the country continues having a stable outlook. Courtesy #DStv403

JOHANNESBURG - South Africa is likely to keep its investment grade status from Moody’s this year.  

The ratings agency says it probably won't make a move if the country continues having a stable outlook.

Moody’s is pointing to our strong institutions and reasonably good foreign currency reserves as some reasons behind why it has not downgraded the country to junk status.

READ: South Africa is close to 'junk status' from all three rating agencies. What could follow?

"So the cost at which they borrow is going to be very important – and government like to compare that cost at which they borrow with the pace of the economy.

If the pace of the economy is low that means that government needs to generate a primary surplus… and we have not had a surplus in South Africa since 2008," said Moody's senior analyst Lucie Villa.

Moody’s says the biggest cloud of uncertainty remains Eskom's recovery with its R440-billion debt and the absence of a plan that is accepted by all stakeholders.

Source
eNCA