Moody’s Investors Service downgraded South Africa for the second time in one year, to a lower investment grade.
Moody’s, which now rates government debt two levels below investment grade, also kept the outlook on its ratings negative, keeping the risk of a further downgrade high.
South Africa’s government bonds in rand are now two levels below investment grade at all three of the world’s major rating agencies.
In March this year, Moody’s became the last major rating to move government bonds below investment grade and, on top of that, retain the negative outlook.
Credit rating agencies said in June after Mboweni’s “emergency budget” that they were skeptical about the government’s ability to stabilize government debt, especially in light of the additional spending and lower tax revenues caused by the Covid-19 pandemic and associated restrictions.