SA braces for S&P update on credit rating

Finance Minister Malusi Gigaba has been fighting to portray the country as a sound investment destination following the Cabinet reshuffle in March.

FILE: A Standard & Poor's document. Picture: AFP

CAPE TOWN - Credit rating agency S&P Global will on Friday follow Fitch and update South Africa's credit rating.

Finance Minister Malusi Gigaba has been fighting to portray the country as a sound investment destination following the Cabinet reshuffle in March.

Some credit ratings agencies were quick to downgrade the country following the axing of Finance Minister Pravin Gordhan and his deputy Mcebisi Jonas.

S&P Global was the first agency to downgrade South Africa's foreign-denominated debt to junk status with a negative outlook following the midnight Cabinet reshuffle.

It will today give an update on whether it will stick with this view or whether it needs to be readjusted.

Fitch gave its update on Thursday, saying that it will keep the local and foreign currency debt at sub-investment grade with a stable outlook citing low growth and "deteriorating governance" as concerns.

Moody's has yet to make an announcement, but the agency has been reviewing South Africa's rating - which is currently two notches above junk.

Experts are concerned that if Moody's also downgrades the country's rand-denominated debt, it could lead to massive capital flowing out of the country.