South Africa is the most exposed of the sub-Saharan economies amid Brexit-related market volatility, Moody's warned on Friday.The ratings agency said it believed the country remained highly vulnerable to investors avoiding risk by pulling money out of emerging markets.Combined with the economic blows of a drought and continued low commodity prices, Moody's said the Brexit vote, which triggered a 5% slide in the value of the rand against the dollar, came at a poor time for South Africa as it struggled with a current account deficit and an economy reliant on investment inflows to keep that deficit from widening.South Africa's highly liquid markets made it a prime target for the reversal of risk appetite, with any further worsening of investor sentiment likely to imperil even the dismal expected economic growth for 2016.The IMF has cut its forecast for South Africa's economic growth this year from 0.6% to 0.1% - just enough to avoid a recession but not enough to grow jobs numbers, according to Finance Minister Pravin Gordhan.FNB economist Mamello Matikinca said Moody's view was nothing new and reflected the flaws in South Africa's economy, and that there was an increased chance that "nervous money" would continue to leave the country.She said if the UK went through with leaving the EU, there would be an impact on foreign direct investment which South African policymakers would not be able to do much to cushion.Standard Bank chief economist Goolam Ballim, however, believes Moody's has been overzealous in calling out South Africa in particular as vulnerable.He said there could be four channels of contagion for any Brexit fallout, with the first and most obvious being trade in goods and services."The UK accounts for a relatively fractional 3% of South Africa's international trade. That's one-fifth of our Chinese trade relationship. While certainly a more depressed UK economy will weigh on trade relationships somewhat, it's comparatively modest."According to Ballim, it was also unlikely that a Brexit event would mean a retraction of UK-controlled or global capital from emerging markets.It was in the nature of invested capital, he said, to seek attractive yields, which emerging markets continued to offer - especially when compared with alternative prospects in the UK or US economies."Over the medium and long term, global capital pools will remain fluid."Two channels of UK-SA investment less often considered, but still important, were flows of remittances from relatives and friends in the UK to Africa.These, Ballim said, were not cyclical like trade and investment flows, and, if anything, during the previous financial crisis in 2008 were shown to be highly resilient."Two-thirds of diaspora flows from the UK go to Nigeria. South Africa receives less than $400-million (R5.8-billion) a year. But there seems to be a greater sense of humanity in the diaspora during trying times."Ballim said that even while the pound had slid in recent weeks, the rand remained relatively weak and South Africa continued to offer value for money for tourists from the UK."The UK is a significant source of visitors from Europe to South Africa - the largest source in Europe. There are two driving forces that shape the flow of visitors - one is UK citizens' income growth and the other is currency effects. Naturally both would encounter headwinds in a weaker UK economy, but that will temper UK-based tourism only at the margins."Looking at a five-year history the rand is still noticeably weakened and offers compelling value to British citizens with the will and capacity for discretionary spending."Taking all these possible channels of transmission of economic volatility into account, Ballim said though there might be some "tempering of commercial relationships between the UK and South Africa, any suggestion of material impairment is grossly exaggerated".peacockb@sundaytimes.co.za..