The Rand gave up acres of ground over the course of the last two days as loadshedding returned to haunt the South African economy.
The economy, already in the doldrums, could hardly afford another round of loadshedding. The ratings agency Moodys will have taken note of the situation and may well change our outlook from stable to negative in the coming weeks, followed by the dreaded downgrade later this year.
If Moody’s also downgrades the economy to sub-investment grade, South Africa will automatically be kicked out of the World Bond Index, resulting in massive outflows of cash.
The government needs to take drastic action now, or the future will remain dark.