Moody’s delays publishing SA ratings review
South African markets on Friday were on edge over the impending review, with some economists fearful that a power crisis will cost the country its last investment-grade rating.
JOHANNESBURG - Rating agency Moody’s said it would not publish a review of South Africa’s debt rating on Friday as indicatively scheduled, without giving a reason for the delay or the next scheduled release date.
In accordance with European Union regulations, Moody’s provides dates for the potential release of both solicited and unsolicited sovereign credit rating actions but can alter these dates at its discretion.
Moody’s rates South Africa’s foreign and local currency debt on their lowest level of investment-grade at ‘Baa3’, with a stable outlook.
South African markets on Friday were on edge over the impending review, with some economists fearful that a power crisis will cost the country its last investment-grade rating and lead to capital flight and the outflows of billions of dollars.
Some analysts were hopeful Moody’s would only revise its rating outlook to negative.
This year South Africa has experienced its worst power cuts in several years, as cash-strapped utility Eskom struggles with capacity constraints. Eskom has not implemented rolling blackouts this week but has warned the electric power system remains vulnerable.
The power crisis is a major challenge for President Cyril Ramaphosa a few weeks before an election at which he will try to reverse a decline in voter support for the governing African National Congress.
The other two big rating agencies, S&P and Fitch, have already downgraded the country’s sovereign to “junk”.