Investments / Economy

Uncertainty is the enemy – SA downgraded to “junk status”

A lot has been said in the media over the last few weeks regarding the possibility of whether South Africa (SA) would be downgraded to “junk status” by Moody’s and thereby be forced to exit the FTSE World Government Bond Index (WGBI).

The SA downgrade and your investments

Like many developing countries, the South African government relies on funding to build and maintain the infrastructure of the country. To enjoy continued access to loans (in the form of government bonds) at affordable interest rates, it’s important that we keep our credit rating healthy. But investors and credit rating agencies are increasingly concerned about our ability to bring our debt levels down and avoid a debt trap.

Moody's downgrade - Assessing it's impact on South Africa

Amid the national lockdown to curb the spread of Covid-19, the downgrade of South Africa's credit rating to 'junk' status by Moody's last week is adding further anxiety and pressure to South Africans.

What does the downgrade mean for South Africa?