Question

Effect of junk status on unemployment

Answer 1

‘Junk status’ is a term describing a country which has fallen below desirable levels of investment according to international rating agencies. Overseas investors would withdraw their money and the government would have to pay much higher interest rates to borrow money to service and repay its massive loans such as those which Eskom, SAA and other State-owned enterprises had built up. Interest rates would go up and the value of the rand would shrink.