The economic growth path of the Chinese economy also needs to be monitored closely. Concluding remarks Monetary policy exerts effects on asset markets such as the bond, stock, and foreign exchange markets. However, it takes a considerable amount of time for monetary policy to have an effect on economic activity in terms of production, employment, prices, and wages.
A ratings upgrade by Moody’s would put South Africa on the same scale as Thailand whose ten-year US-dollar denominated bond spread is currently trading around 52 basis points over US Treasuries. This suggests that South Africa’s ten-year US dollar denominated bond, which is currently at 85 basis points above US Treasuries, could rally further.