S&P reaffirms South African BB+ credit rating
S&P Global and Fitch downgraded the country to junk status earlier this year after President Jacob Zuma fired finance minister Pravin Gordhan and reshuffled his cabinet.
Agency Fitch also reaffirmed its junk status rating on Thursday - citing tensions within the governing party and slow economic growth.
S&P Global has cited similar problems, saying growth remains weak, posing a risk to the pace of fiscal consolidation.
Following the announcement by Fitch on Thursday, the Treasury reacted favourably, saying it was relieved that South Africa had not been downgraded further.
It said there had been a concerted effort by the government to stop the country’s rating from sliding. The rand also fell substantially after the Cabinet reshuffle but has recovered somewhat since.
It’s been trading at around R12.80 to the dollar today, with economists saying a number of international factors are favouring the local currency.
(Edited by Zinhle Nkosi)