S&P Global Ratings has cut SA’s foreign currency rating to sub-investment grade status. Two other global ratings agencies, Fitch and Moody’s, may well follow suit. The Conversation Africa’s editor Caroline Southey asked Prof Adrian Saville to explain the significance of the decision. Q: How serious is this? A: Ratings downgrades are a clear signal to policymakers, investors, business and society more broadly that things are not on track. Although S&P’s decision to downgrade SA was only announced on Monday night, after President Jacob Zuma’s disastrous cabinet reshuffle, it’s probably fair to argue that the decision was already in the price and that it has been there for some time. To substantiate this claim, South African government bond yields have been priced similarly to the likes of Brazil and Russia for the best part of a year. Indeed, based on economic growth projections alone, SA has been failing S&P’s acid test for investment grade status for some time. If anything, then, th...

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