Fitch downgrades South Africa to junk status
Ratings agency says the downgrade reflects the view that recent political events, including a major cabinet reshuffle, will weaken standards of governance and public finances
Fitch has become the second major rating agency to downgrade SA’s rating to junk status, cutting both the foreign currency and local currency ratings by one notch on Friday afternoon on concerns that recent political events, including a major Cabinet reshuffle, would weaken standards of governance and public finances and was likely to result in a change of economic policy direction. But Fitch has put the new rating on Stable outlook, indicating it has no further downgrade plans for now, in contrast to S&P which put a negative outlook on its new rating. Fitch's move will almost certainly lead to a rise in government debt-servicing costs, which will mean less money for critical services such as housing, education and sanitation, which could incite even more protests over service delivery that have already rocked towns across the country. The rand weakened on the news, to an intraday worst level of R13.8426 to the dollar after hovering around the R13.77$ level for the better part of t...
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