South Africa’s rand plumbed a record low after the country lost its last investment-grade credit rating, and investors anticipated it may slide deeper into junk as the spread of the coronavirus decimates the economy.
The currency dropped as much as 2.5% to 18.0863 per dollar, breaching 18 versus the greenback for the first time.
It traded 1.8% down at 17.9392 by 6:58 a.m. in Johannesburg, still the worst performance among emerging-market currencies tracked by Bloomberg. Yields on 10-year government bonds climbed three basis points to 11.73%.
Moody’s Investors Service on Friday cut its assessment of South Africa’s debt to sub-investment grade, saying unreliable electricity supply, persistently weak business confidence and investment, and long-standing structural labor market rigidities continue to constrain economic growth.
While cutting South Africa’s rating to Ba1, one level below investment grade, Moody’s kept its outlook on the debt at negative, which it said “reflects downside risks to