Rating Agency Downgrades South Africa To Junk Status

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Meanwhile S&P's decision to downgrade South Africa's local currency debt sent the rand tumbling. However, Moody's decision to only place South Africa on review for a downgrade may have prevented a larger sell-off in the currency. The rand weakened 2 percent against the dollar after S&P's announcement, moving from 13.9 Rand per dollar to a session low of 14.1675. It did stage a small recovery on Monday morning, helped by a very weak dollar. Analysts say Moody's hitting the pause button saved the country billions in potential bond outflows. But the downgrade to sub-investment grade by S&P implies that South African bonds will fall out of the Barclays Global Bond Index, with estimated outflows of up to $2 billion
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South Africa