S & P Downgrades SA Credit Rating to Junk Status

Faizel Patel, Radio Islam News – 03-04-2017

Standard & Poor’s (S &P) Global has downgraded South Africa’s sovereign credit rating to BB+ from BBB- grade.

The ratings agency says the recent firing of finance minister Pravin Gordhan in a cabinet reshuffle by President Jacob Zuma posed a risk to the fiscal policy.

“The downgrade reflects our view that the divisions in the ANC-led government that have led to changes in the executive leadership, including the finance minister, have put policy continuity at risk. This has increased the likelihood that economic growth and fiscal outcomes could suffer.”

Earlier on Monday, new Finance Minister Malusi Gigaba said he doubted that the country would be downgraded as a result of one man.

The rand fell by as much 2 percent to the dollar in response to the news of the downgrade, while government bonds also weakened sharply.

In December last, S&P kept South Africa’s credit rating unchanged at BBB-, just one level above junk status.

Twitter: @FaizelPatel143

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