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

Moody’s said the nation’s low exposure to foreign currency-denominated debt was a “credit strength” and would help to mitigate the economic impact of the currency’s depreciation. South Africa’s foreign debt amounted to 16 percent of gross domestic product at the end of June last year, the ratings agency 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 weakened 8.29c to be bid at R11.055 to the dollar at 5pm yesterday.

The ruling ANC faces its toughest election 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.” – Bloomberg