Rand hit as Moody’s hints at downgrade

The rand weakened to more than R15 against the dollar on Monday and bond yields rose minutes after ratings agency Moody’s hinted at a possible downgrade next month, saying South Africa’s growth was unlikely to improve due to lacklustre private sector demand. Photo: Siphiwe Sibeko/Reuters
JOHANNESBURG – The rand weakened to more than R15 against the dollar on Monday and bond yields rose minutes after ratings agency Moody’s hinted at a possible downgrade next month, saying South Africa’s growth was unlikely to improve due to lacklustre private sector demand.

Moody’s slashed the country’s growth forecast by more than half to 0.7 percent this year from the 1.5 percent it projected five months ago.

The rand surrendered as much as 0.7 percent to trade at R15.01 against the dollar by 5pm.

Moody’s cited muted consumer demand and the negative impact on the economy caused by Eskom’s load shedding for the change in forecast.

“We attribute the persistent economic weakness to lacklustre domestic private-sector demand – both household spending and investment – and the detrimental impact of widespread power outages on the manufacturing and mining activity,” Moody’s said.

Source: iol.co.za