S&P cuts SA's local currency rating to junk

Share

In June, S&P affirmed SA's long-term foreign currency sovereign credit rating at a sub-investment grade rating of BB+, and retained its negative outlook on all the long term ratings and affirmed SA's long-term local currency sovereign credit rating at an investment-grade rating of "BBB-", and also retained its negative outlook.

The announcement saw the rand weakening by 2% from R13.90 to R14.16 to the USA dollar.

Thirteen of 25 economists surveyed on Monday said either S&P Global Ratings or Moody's was likely to cut the local currency rating to junk on Friday.

"Weak GDP growth has led to further deterioration of SA's public finances beyond our previous expectations", S&P said in its ratings action, citing the weakening economic and fiscal trajectory.

Standard & Poor's and Moody's are set to make their announcements on Friday.

Moody's announcement that it had not lowered its Baa3 long-term issuer and senior unsecured bond ratings of South Africa's government, but had rather put it on review for downgrade, signalled that it was awaiting the outcome of December's ANC elective conference, and possibly February's budget announcement, before making a decision on South Africa's future. Moody's holds South Africa local and foreign issued debt at one rung above junk. "This will also allow Moody's to assess the policy implications of political developments during the review period and the likelihood of pressures on South Africa's key policymaking institutions persisting".

Читайте также: Escaped circus tiger shot dead after roaming Paris streets

National Treasury said in a statement on Thursday that it had "noted Fitch's decision not to further downgrade South Africa deeper into "junk status".

It said in a statement that the fiscal and economic risks faced by the country were more pronounced than initially assumed.

"Two of the three major ratings agencies now have South Africa's foreign and local currency government debt classified as so-called "junk" with only Moody's retaining their local currency rating at the lowest level of investment grade, and placing the country's credit on review for a downgrade", it said.

The agency will only complete its review after the 2018 budget.

The South African rand fell early on Thursday ahead of a central bank interest rate decision later in the day.

При любом использовании материалов сайта и дочерних проектов, гиперссылка на обязательна.
«» 2007 - 2017 Copyright.
Автоматизированное извлечение информации сайта запрещено.

Код для вставки в блог

Share