Moody's leaves S. Africa's credit rating unchanged at investment grade

Source: Xinhua| 2019-04-03 00:41:58|Editor: ZX
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JOHANNESBURG, April 2 (Xinhua) -- Credit rating agency Moody's on Tuesday announced that South Africa's sovereign credit ratings would be unchanged at Baa3 with a stable outlook.

Moody's is the only rating agency that has maintained South Africa at investment grade, after Standard & Poors and Fitch downgraded the nation to junk status in 2017.

Prof Jannie Rossouw from Wits Economic and Business Sciences School told Xinhua on Tuesday that the Baa3 rating favors the country.

"This is good news for South Africa and it gives it time to sort out its issues and be more certain on policies to avoid a downgrade in six months time," said the professor.

The rating agency however expressed concerns about state owned power utility Eskom's financial position, noting that the tariffs hikes energy regulator Nersa granted to it in March would not change its financial position.

Eskom's debt stands at R420 billion (29.5 billion U.S.dollars). In February, Finance Minister said that R69 billion would be given to the indebted company in the next three years.

Moody's said that none of these measures set to assist Eskom would be adequate.

With the World Bank projecting South Africa's economic growth to be at 1.3 percent in 2019, Moody's report is expecting the same growth. The agency said more policies in the country under President Cyril Ramaphosa would be more clear after next month's general election.

Moody's was expected to release its South Africa's credit opinion on Friday, but it delayed it to Tuesday.