S&P downgrades South Africa’s credit rating to junk status

South Africa’s sovereign credit rating was downgraded to junk status on Monday following an emergency S&P Global Ratings meeting at the weekend, Business Day reported.

The decision follows President Jacob Zuma’s Cabinet reshuffle on Thursday where several ministers, including Finance Minister Pravin Gordhan and his deputy, Mcebisi Jonas, were axed. Experts say other ratings agencies are likely to follow suit.

South Africa’s ability to borrow on the market took a hit within hours of Gordhan’s removal.

“We were hoping, today, for example, to raise R600-million in the bond market on a short-term basis — and bids for just over R200-million were actually offered, because there’s this concern about the economy rising from the announcements made yesterday,” Gordhan said on Friday.

S&P on Monday placed South Africa’s credit rating to speculative grade (commonly referred to as “junk”), a one-notch reduction to BB, and the ratings agency said “the economic crises President Jacob Zuma plunged the country into with his midnight cabinet reshuffle” prompted it to hold an emergency review at the weekend instead of June 2, as was scheduled, according to Business Day.

Moody’s scheduled review of South Africa is on Friday (April 7) and it remains unclear when Fitch, which has a near-junk status rating for the country at BBB-, will release its review.

Keep the powerful accountable

Subscribe for R30/mth for the first three months. Cancel anytime.

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.

Ofentse Mboweni
Ofentse Mboweni is communications officer for the Grow Great campaign. He has a keen interest in South African politics and history, is an avid reader and loves anything to do with good hip-hop music, literature and afrofuturism. Described as a "blerd" and postmodernist by some, he prefers to be called OJ.

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

Police were left dangling during July unrest, KZN top cop...

Whoever organised the unrest in response to the pending arrest of Jacob Zuma was responsible for the lethal violence that followed, the KZN police commissioner Nhlanhla Mkhwanazi said.

Urgent interdict filed to block Shell’s Wild Coast seismic survey

Shell’s 3D seismic survey is set to begin on Wednesday. But a high court application brought by rights groups to block it will be heard as an urgent matter on Tuesday

Police intelligence surprised by July unrest ‘modus operandi’

Minister of police only receives information from national commissioner that relates to him, commission hears

Sars appeals to ConCourt to keep Zuma’s tax secrets

The high court ruled banning the release of tax information was unconstitutional. Sars disagrees, saying is not only wrong but makes an exception of the former president
Advertising

press releases

Loading latest Press Releases…
×