SA downgraded to Junk Status

Moody's finally made the call following previous delays. Government has responded by saying the downgrade could not have come at a worst time. 

In its statement National Treasury notes that key factors behind the downgrade include weak growth and constrained capacity toward stimulating the economy as well significant rise in government debt. 

Treasury further says the news indicates that economic growth will be even weaker while debt will spike further. Government says the timing could not be any worse as South Africa's economy takes a further knock from the Coronavirus outbreak. 

Treasury says going forward government remains committed to implementing economic reforms in order to stimulate economic growth. 

Among key areas of focus going in the immediate future will be ailing state-owned entities like Eskom. 

To this end government is expected to provide medium term support to the power producer in order to honour the state's contractual obligation of power supply.