Moody's again skips rating review of SA's sovereign debt

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Ratings agency Moody’s again skipped issuing an much-anticipated assessment of South Africa's sovereign credit rating on Friday night. 

This means the country's credit rating remains unchanged at Baa3, the last rung of investment grade, with a stable outlook. 

In a short note at 00:50 on Saturday morning, Moody's listed SA as one of seven issuers whose ratings were not updated. It did not provide any reasons. 

Moody's is the last of the big three international rating agencies to not have downgraded SA to junk. Rival ratings agencies Fitch and S&P both downgraded SA to sub-investment grade in 2017. 

If Moody's had downgraded SA to sub-investment grade, the country would have been ejected from the major Citi World Government Bond Index, forcing asset managers to sell billions of rands' worth of SA bonds.

A downgrade would also have been seen as a blow to President Cyril Ramaphosa's goal of attracting $100bn in new investment into South Africa and kick-starting the country's sluggish economic growth rate.  

Ahead of the scheduled announcement, economists had been split over the likelihood of a full downgrade. Four out of the five economists Fin24 spoke to ahead of the expected review predicted that Moody's would lower the country's outlook from stable to negative, while one predicted a full downgrade to junk. 

This is the second time in a row that Moody's has skipped a scheduled review of SA's sovereign debt. The date of the next scheduled rating action is November 1, 2019. 

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