Johannesburg - The rand’s depreciation, which is partly being fuelled by investor uncertainty ahead of elections in May, has a limited impact on South Africa’s credit rating, Moody’s Investors Service said.

The nation’s low exposure to foreign currency-denominated debt is a “credit strength” and will help to mitigate the economic impact of the rand’s depreciation, Moody’s said in an e-mailed statement today.

South Africa’s foreign debt amounted to 16 percent of gross domestic product at the end of June, it said.

Moody’s downgraded South Africa’s debt in September 2012 to Baa1, the third-lowest investment grade, with a negative outlook, as economic growth slowed and the government’s budget deficit widened.

Standard & Poor’s and Fitch Ratings have a BBB rating, one level below Moody’s.

The rand has lost 5.4 percent against the dollar this year, the worst performer among 16 major currencies tracked by Bloomberg. It fell 0.8 percent to 11.0875 per dollar as of 3:28 p.m. in Johannesburg.

The African National Congress, which has won every election since 1994 with almost two-thirds supports, faces it toughest challenge yet after a series of corruption scandals and protests over a lack of jobs and housing.

“Uncertainty as to whether the acrimonious political atmosphere could have consequences for the economic policy framework is unnerving foreign investors, who have been pulling some of their money out of the local market in recent months,” Moody’s said. - Bloomberg News