The South African rand plunged to a record low after Moody’s downgraded the government’s debt before recovering slightly Monday.
This came after the credit rating agency cut South Africa’s rating below investment grade, citing a “continuing deterioration in fiscal strength and structurally very weak growth”.
The rand traded at 18.05 against the US dollar in Asia early Monday but then recovered slightly to around 17.90 during African trading hours.
According to Wichard Cilliers, head of dealing at TreasuryONE, a South African private financial advisory firm: “The ZAR has been the worst-performing emerging market currency over the past week and traded at its weakest level ever at R18.05 in Asia early this morning,”
The Rand has now weakened 17 percent over the past month, culminating in the nationwide lockdown as the country try to curb the spread of coronavirus.
Two other major international rating agencies Fitch and S&P had cut the credit rating of the country to sub-investment level in 2017.
The government said Moody’s move “could not have come at a worse time” as it would “further add to the prevailing financial market stress”.
