DA demands answers from Moody’s

A sign for Moody's rating agency stands in front of the company headquarters in New York, September 18, 2012

A sign for Moody's rating agency stands in front of the company headquarters in New York, September 18, 2012

The DA will write to Moody’s to request an explanation on the reasons why there was no communication on South Africa’s credit rating.

The Democratic Alliance has expressed concern at the decision by Moody’s ratings agency on Friday not to make any sort of announcement regarding South Africa’s sovereign credit outlook.

Despite having publicly stated that it would update its position by the end of March 2019 it had not done so, DA spokesman Alf Lees said.

Moody’s has not even given any explanation of why it has not given an update. At the very least there should have been a statement, supported by research, why the rating was to remain unchanged at Baa3 neutral.

“This non-event by Moody’s has left the investor market none the wiser and has simply extended the uncertainty. While Moody’s next scheduled update is expected to be announced on the 1st of November 2019, the next update could occur at any time,” he said.

This raised several questions. Why has Moody’s chosen to delay and not communicate until after the May 8 general elections, considering the threat the African National Congress’s “energy crisis poses for the economy?” What concerned the DA the most was that investors were now still unclear about South Africa’s status. With a massive unemployment crisis in the country, certainty had to be provided to potential investors.

The DA would write to Moody’s to request an explanation on the reasons why there was no communication on South Africa’s credit rating, as well as a clear commitment on when the next update would be. Without this clarity, international and local investors would without doubt remain cautious if not outright opposed to investing in South Africa, Lees said.

– African News Agency (ANA)

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