CAPE TOWN- Ratings agency Moody’s downgraded South Africa’s sovereign credit rating to "junk" status on Friday night.
The rating agency made the call due to South Africa's escalating debts and its inability to curb its spending.
In response the National Treasury noted that “the decision by Moody’s could not have come at a worse time. South Africa, like many other countries, is seized with containing the outbreak of the coronavirus. The impact of Covid-19 is felt across various sectors of the economy".
Moody's downgraded South Africa's one notch to 'Ba1' from 'Baa3' and maintained a negative outlook.
The implications of the downgrade could mean that it would be more difficult for government to pay back its debts.
Moody's has become the last of the big three credit-rating agencies to downgrade South Africa to junk status. The other agencies, Fitch and Standard & Poor’s downgraded the country three years ago.
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