Moody's Downgrades South Africa's Credit Rating to 'Junk Bond' Status

[Asia Economy Reporter Hwang Yoon-joo] On the 27th (local time), international credit rating agency Moody's downgraded the sovereign credit rating of the Republic of South Africa to 'junk bond' (non-investment grade bond) level.

According to Reuters on the 28th, Moody's lowered South Africa's credit rating from 'Baa3' to 'Ba1' by one notch and maintained a 'negative' credit outlook.

South Africa entered a recession in the fourth quarter of last year, and the novel coronavirus disease (COVID-19) is rapidly spreading.

Moody's credit rating adjustment implies that if economic performance worsens or government debt increases faster than expected, further downgrades may occur. South Africa's Treasury expressed concern that this downgrade would increase financial market stress.

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