JOHANNESBURG - South Africans can heave a sigh of relief after avoiding a downgrade of the country's sovereign debt to below investment grade by rating agency Moody’s Investors Service, a confident Deputy Finance Minister Mondli Gungubele said in Sandton, Johannesburg, yesterday.

Moody's has left South Africa's credit rating unchanged at Baa3, citing the appointment of Finance Minister Nhlanhla Nene as one of the reasons for its decision.

A confident Deputy Finance Minister Mondli Gungubele on Thursday announced that after interactions with investors and rating agencies during last week's roadshows Johannesburg, he expected to yielded positive results.

Moody’s next review on South Africa’s credit rating, has been the first real test of whether investors and ratings agencies are happy with policy direction under new president Cyril Ramaphosa.

Had the rating agency decided to downgrade the country to sub-investment grade or junk status, South Africa would've been removed from the world’s government bond index hiking the price of credit for the state. This would've resulted in billions of rands leaving the country.

Fitch and S&P Global downgraded South Africa to “junk” status last year after Ramaphosa’s predecessor Jacob Zuma inexplicably fired revered finance minister Pravin Gordhan, adding to increased doubts about the governing ANC party’s commitment to sound economic policy.

Moody's retained its Baa3 long-term issuer and senior unsecured bond rating but placed it on review for downgrade, citing “a series of recent developments which suggest that South Africa's economic and fiscal challenges are more pronounced than Moody's had previously assumed”.

Sentiment has since perked up, with the rand rallying to three-year highs against the U.S. dollar, after former businessman Ramaphosa was first elected to lead the ANC at a December conference, and then sworn in as the country’s president last month after Zuma, embroiled in allegations of corruption, was forced to step down.