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Economists fear further downgrades ahead of rating announcements

Moody’s and Standard and Poor’s Global are remaining tight-lipped as they assess the country’s financial state.

FILE: Moody's headquarters in New York. Picture: AFP

JOHANNESBURG - Moody’s and Standard and Poor’s Global are remaining tight-lipped as they assess the country’s financial state.

They're expected to reveal on Friday on how they rate South Africa.

Economists fear further downgrades by the agencies will see the rand lose major ground.

S&P Global has South Africa's foreign currency debt at junk status but the local currency debt is still one notch above sub-investment grade.

Moody's has both local and foreign currency debt one notch above junk, while Fitch is the only agency that has the country in full junk status.

Standard Bank chief economist Goolam Ballim says there are concerns about significant outflows if there are further downgrades.

“This announcement could result in approximately 10 billion dollars of sales of local bonds.”

Nedbank economist Isaac Mashego adds: “Even if it doesn’t happen this time around, we could be downgraded early next year.”

Fitch is expected to release its ratings next week.

(Edited by Shimoney Regter)