Was the Moody's downgrade already priced into South African markets? The direction that the rand, now near record lows, and bonds took during the month suggest this was the case. But no one knows how to price in the full impact of the Covid-19 pandemic.
For South African markets, March 2020 swept in like a lion and ended in lockdown.
The rand lost close to 16% of its value against the US dollar over the course of the month and on Monday, March 30, it went above 18 to the dollar for the first time - a record low. The elephant depicted on the R20 note is now almost on par with one US buck. This latest bout of weakness came after Moody's downgraded South Africa's credit rating to junk.
But since the downgrade, the rand has lost about 2%. So it was within spitting distance of its record low - physical distancing be dammed - when Moody's pulled the trigger. Against the backdrop of all the other madness we have seen in March, that suggests the widely expected downgrade was "priced in" as they say, which means the event had been accounted for in advance and priced accordingly.