Answer to Question #300043 in Macroeconomics for Fanatic

Question

Use a diagram to illustrate and explain the effect of a credit rating downgrade in South Africa on the dollar-rand exchange rate.

Answer 1

The desired diagram to illustrate the effect of a credit rating downgrade by Moody’s on the dollar/rand exchange rate is given below: Moody's is the final major institution to have South Africa as an dynamic moneylender and is one of the two. The rand resumed on Thursday due to new volatile markets, leading the Pound-to-Rand price to rise above the key level in the charts, ahead of Moody's recent debt measurement decision even though one major bank told clients about South African currency.