It is D-Day for South Africa, or should that be M-Day (M for Moody’s) ?
Moody’s has been kind to us over the years, keeping us at investment grade even though other ratings agencies like Fitch and Standard and poor’s have junked our economy.
Has the time come for the big drop? How many times can we dodge the bullet? It is judgement day so to speak. The Finance Minister, Tito Mboweni, stated yesterday that it doesn’t look good for us.
So, what do we here at the Mycoins.co.za think will happen? Let us put it into percentages:
No action: 10%. Moody’s took no action earlier this year and they cannot do so again, or their credibility will suffer.
Outlook adjustment: 60%. Our outlook will more than likely be adjusted from ‘stable’ to ‘negative’.
Downgrade to Junk: 30%. Moody’s rarely does a ‘double drop’, but they are under pressure to take action against South Africa as they have been too nice for too long.
Ratings News normally breaks at night (our time) between 18h00 – 23h00.