* Rand falls following Moody’s downgrade
* Currency dips 0.6 pct
* Govt bonds steady
JOHANNESBURG, Sept 27 (Reuters) – South Africa’s rand dipped
0.6 percent against the dollar on Thursday after Moody’s cut the
country’s government bond rating by one notch to Baa1 from A3,
24 hours ahead of its inclusion into Citigroup’s World
Government Bond Index.
The rating agency cited worries about the country’s
institutional strength, investment climate, as well as future
political stability. It added that the outlook remains
negative.
The revision reflects Moody’s view of the South African
authorities’ reduced capacity to handle the current political
and economic situation and to implement effective strategies
that could place the economy on a path to faster and more
inclusive growth.
The rand dropped to 8.2850 following the
announcement, after touching a session high of 8.1680.
It later recovered some of its losses and was trading at
8.2260 against the greenback at 16:05 GMT, barely changed from
Wednesday’s New York close of 8.2350.
“It’s a normal market reaction,” said Kabelo Rikhotso, head
of equity, fixed income and property funds at Investments
Solutions.
Continued…
