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Standard & Poor: Agency Downgrades SA Credit Rating to 'Junk' Status

The credit ratings agency Standard & Poor's has downgraded South Africa's foreign currency sovereign credit ratings to below investment status.

The move, widely predicted in the wake of President Jacob Zuma's firing of finance minister Pravin Gordhan and his deputy, Mcebisi Jonas, is likely to make borrowing more expensive, result in higher interest on debt repayments and discourage much-needed foreign investment in the country.
Former Finance Minister

S&P Global Ratings said in a statement after markets closed in Johannesburg on Monday that the downgrade reflects its view "that the divisions in the ANC-led government that have led to changes in the executive leadership, including the finance minister, have put policy continuity at risk. This has increased the likelihood that economic growth and fiscal outcomes could suffer."

The decision was taken ahead of the agency's previously-scheduled review of its rating, as a direct consequence of Zuma's cabinet reshuffle last Thursday. Another agency, Moody's, is scheduled to release a review on Friday. - Online Sources

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