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The rand perked up a little on Tuesday morning, a day after President Cyril Ramaphosa suspended the South African Revenue Service (SARS) commissioner Tom Moyane, in yet another decisive step to restore credibility to key government institutions.
“It is a good move given that SARS was in general implicated in negative headlines around the state capture story. In a sense, it’s a final attempt to convince Moody’s not to downgrade SA’s debt rating,” ETM Analytics market analyst Halen Bothma said.
Moody’s is the only major ratings agency to still rate SA’s debt at investment grade, after S&P Global Ratings and Fitch cut it to junk in 2017.
Any further downgrade will automatically be a universal one, in which case the country’s debt will be excluded from the Citi world government bond index.
Ramaphosa has made good on his pledge to overhaul government institutions and state-owned enterprises, which have long been a drag on the fiscus and have been flagged by ratings agencies as potential danger to the country’s debt rating.
Ramaphosa recently oversaw leadership changes at power utility Eskom, long accused of aiding and abetting state capture.
Local inflation data and the Reserve Bank’s quarterly bulletin, which contains crucial current account data, are due for release later in the day.
Economists expect inflation to moderate to 4.10% in February, from 4.40% in January.
At 8.22am, the rand was at R12.0134 to the dollar from R12.0331, R14.8268 to the euro from R14.8451 and at R16.8606 to the pound from R16.8622.
The euro was at $1.2340 from $1.2334. – BusinessLive
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