The downgrade of South Africa’s top banks is another warning sign for the battered South African economy and will result in lending becoming more difficult for already-struggling consumers.
This is according to economists, who said the downgrading of banks followed suit when a country was downgraded.
Moody’s announced on Monday that FirstRand, Nedbank, Standard, Absa and Investec had their creditworthiness cut to one notch above junk status with a negative outlook.
“The primary driver for the rating downgrades is the challenging operating environment in South Africa, characterised by a pronounced economic slowdown, and weakening institutional strength,” Moody’s said.
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