S&P downgrades S. Africa to junk statusArchive
JOHANNESBURG: S&P Global Ratings downgraded South Africa’s sovereign credit rating to BB+ from BBB- grade on Monday, saying the recent firing of its internationally respected finance minister posed a risk fiscal policy.
The rand fell by as much two per cent to the dollar in response to the news, while government bonds also weakened sharply. “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,” S&P said in a statement.
S&P assigned South Africa a negative outlook, saying this reflected its view that political risks will remain high this year, and that “policy shifts are likely which could undermine fiscal and growth outcomes more than we currently project.”
Published in Dawn, April 4th, 2017