South Africa Cut to Junk for the First Time Since 2000
- S&P reduces foreign-currency rating by one level to BB+
- Cabinet changes last week have put policy continuity at risk
South Africa's Zuma May Face No-Confidence Motion
South Africa lost its investment-grade credit rating from S&P Global Ratings for the first time in 17 years in response to a cabinet purge by President Jacob Zuma that’s sparked increasing calls for him to resign. The rand weakened.
S&P cut the foreign-currency rating to BB+, the highest junk score, on Monday and warned that a deterioration of the nation’s fiscal and macroeconomic performance could lead to further reductions. The local-currency rating was reduced to BBB-, still investment grade, from BBB. The outlook on both ratings was kept at negative, signaling that the next move could be downward. Moody’s Investors Service, which rates the nation at two levels above junk with a negative outlook, said the rating is under review for a downgrade.