WATCH | Going junk in the time of Covid-19: What you need to know
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Ratings agency Moody's moved South Africa to "junk" status on March 27 2020 after revising the outlook on the country's last investment-grade credit rating to "negative" because of a slowdown in economic growth and rising debt burden.
Here is what it means for SA:
The move was expected in the face of SA’s poor GDP growth performance and fragile fiscal position, even before the onset of the Covid-19 pandemic.
South Africa has also been evicted from the benchmark World Government Bond Index of local currency debt, which could trigger billions of dollars of passive outflows.
The South African government has been forced into repeated bailouts of state companies such as struggling power firm Eskom, which is due to receive more than R100-bn ($6.65-bn) of state money over the next two fiscal years.
Moody’s dropped SA’s rating to Ba1, with the outlook remaining negative - bringing it in line with the subinvestment-grade ratings from peer agencies Fitch and S&P Global.