South African rand flat after Moody’s keeps the country’s rating, outlook steady

JOHANNESBURG: The rand started the week flat as traders assessed Moody’s decision to keep South Africa’s credit rating and outlook unchanged, while awaiting key data releases that will give indications of demand and output trends at the start of the fourth quarter.

At 0703 GMT, the rand traded at 16.9375 against the dollar , a whisker away from Friday’s close. Moody’s kept South Africa’s credit rating at Ba2 saying its decision reflected the nation’s “low growth potential”, while also leaving the outlook stable.

Nedbank economists had expected the ratings agency to at least revise South Africa’s outlook to positive from stable.

“The stable outlook reflects our expectation that while economic growth is likely to improve, it will remain modest, with the government’s debt burden remaining elevated, albeit stable, over the medium term,” said Moody’s.

Investor attention will shift to retail sales data on Wednesday, and mining and manufacturing production figures on Thursday, while global traders also keep tabs on an interest rate decision by the Federal Reserve for clues on the health of the world’s largest economy.

South Africa’s benchmark 2035 government bond was also flat in early deals, with the yield at 8.315%.