JOHANNESBURG- The rand trading earlier on Thursday was slighter weaker as the markets are cautious over the expected announcement by rating agency’s review on Friday.
The Rand was trading R11.8375 early on Thursday morning, o.2% lower to the dollar.
Reuters polled 18 economist and only two said that South Africa would avoid a credit downgrade by Moody’s, which currently has the country’s rating one notch up junk status.
If Moody’s does downgrade the country it would see South Africa removed from Citi’s influential World Government Bond Index, which will trigger up to R100 billion ($8.45 billion) in selling by foreign investors.
New finance minister Nhlanhla Nene said earlier this month that he was not sure what Moody’s decision will be. He meet with senior Moody’s analysts in London and told them of plans of government’s plan of cutting spending and increase revenues to improve the country’s financial books.
Government bonds changed a little, the yield on the benchmark 2026 instrument was at 8,030%.
Photo Credit- Uniquest Travel & Tours
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