Downgrade of South Africa’s top banks is another red flag
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.