Fitch latest ratings agency to downgrade South Africa to junk

Ratings agency Fitch has followed rival S&P and downgraded South Africa’s sovereign credit rating.

Fitch downgraded South Africa to ‘BB+’ from ‘BBB-‘.

Like S&P Global Ratings, which cut South Africa’s foreign currency debt to speculative grade or “junk” status in an unscheduled review ont Monday, Fitch cited the political tensions and the sacking of finance minister Pravin Gordhan as one of the reasons for the downgrade.

“The downgrade of South Africa’s Long-Term IDRs reflects Fitch’s view that recent political events, including a major cabinet reshuffle, will weaken standards of governance and public finances,” the ratings agency said in a statement.

The downgrade of South Africa’s Long-Term IDRs reflects Fitch’s view that recent political events, including a major cabinet reshuffle, will weaken standards of governance and public finances

It added that it believes that following the government reshuffle, fiscal consolidation will be less of a priority given the president’s focus on “radical socioeconomic transformation”.

This is a developing story.

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