The day after SA’s local currency rating was cut to junk
Weak GDP growth and political risks have led to further deterioration of SA’s public finances beyond our previous expectations,” S&P said in its ratings action late on Friday evening.
“We think the government will attempt to introduce offsetting measures in an effort to improve budgetary outcomes, but these may not be strong enough to stabilise public finances, and may weaken economic growth further in the near term.”
Therefore S&P Global Ratings cut SA’s local currency rating to sub-investment grade on Friday, but raised its outlook to stable from negative. S&P lowered SA’s long-term local currency rating to BB+ from BBB- and also lowered its long-term foreign currency rating to BB with a stable outlook. Moody’s placed SA’s rating on review for a downgrade the same evening. A few days after Fitch confirmed it’s ratings.
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