As expected S&P Global Ratings cut SA’s local currency rating to subinvestment grade on Friday, but raised its outlook to stable from negative. In line with expectations the ratings agency lowered SA’s long-term local currency rating to BB+ from BBB-. The rand initially fell to R14.15 to the dollar, from R13.88, soon after the announcement but recovered to R14.10 shortly thereafter. Both Moody’s and S&P had SA’s debt on the last rung of investment grade for its local currency long-term sovereign debt (and also foreign currency from Moody’s). Many economists anticipated that SA was at risk of losing these remaining investment grade ratings after a lacklustre medium-term budget policy statement. 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 ...
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