The rand was range-bound at midday on Friday as traders awaited US jobs data in the afternoon and rating agency Standard & Poor’s’ (S& P’s) review of the South African sovereign’s credit rating on Friday night.

Fitch Ratings may also release its report.

Global investors are awaiting US nonfarm payroll data for clues on the timing of a possible interest-rate increase in the world’s largest economy.

At 11.22am‚ the rand was at R15.5938 to the dollar from R15.5739 at the previous close. It was at R17.3781 against the euro from R17.3675 previously‚ and at R22.4982 against the pound from R22.4708 previously.

The euro was at $1.1145‚ from $1.1152 previously.

KPMG SA economist Christie Viljoen said a sovereign rating did not assess countries and their economies‚ but rather the public entity charged with managing the country and which was able to issue financial instruments.

In December 2015‚ S& P rated South African sovereign BBB-(the lowest possible investment grade rating) with a negative outlook.

Any downward adjustment in the country’s rating would place the South African government in noninvestment-grade territory‚ referred to as junk status‚ he said.

Viljoen said analysts believe a downgrade would result in a weaker exchange rate‚ a decline in local equities‚ and a rise in government bond yields.

Viljoen said 15 countries had had their investment-grade ratings revoked by major rating agencies over the past three decades‚ but were able to regain their investment-grade ratings status over time.

These included Colombia‚ Croatia‚ Hungary‚ Iceland‚ India (twice)‚ Indonesia‚ Ireland‚ Korea Republic‚ Latvia‚ Romania‚ Slovakia‚ Slovenia‚ Thailand‚ Turkey and Uruguay.

These countries’ diverse experiences showed that it took on average seven years to again graduate to the investment-grade club‚ Viljoen said. — TMG Digital/BDlive