Wed, 04 Aug 2021

Moody's skips South African ratings review

08 May 2021, 17:40 GMT+10

The credit agency Moody's has skipped a scheduled review of South Africa's sovereign rating.

The announcement was expected late on Friday night. Instead, the agency published a notice to say that the ratings for South Africa - and other countries like Denmark and Italy - were not updated.

Moody's did not say when next a ratings review can be expected.

Last year, Moody's stripped South Africa of its investment grade rating, downgrading government bonds to "junk". A "junk" rating means there's a bigger chance that the government won't be able to pay back its debts.

While still strained, South Africa's government finances currently look in better shape than expected. The budget deficit (R552 billion) for the past year was 11.2% of GDP, Bloomberg reported this week. This was far lower than government's own projections, and thanks to surprisingly strong tax income, as well as subdued state spending.

The dollar also took a hit after shocking US employment numbers were released on Friday. Only 266 000 new jobs were created in April, after the markets expected around 1 million. The unemployment rate rose to 6.1%.

Source: News24

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