Standard & Poor’s Global has announced South Africa’s sovereign credit rating has been downgraded to BB+.
The rating agency’s decision has been taken on the back of political and institutional uncertainty.
Concerns of a downgrade were raised already when President Jacob Zuma announced his Cabinet reshuffle in which Pravin Gordhan was removed as Finance minister.
Gordhan’s deputy Mcebisi Jonas was also axed.
Former Home Affairs Minister and ANC Youth League president Malusi Gigaba replaced Gordhan at the National Treasury.
In December last, S&P kept South Africa’s credit rating unchanged at BBB- , just one level above junk status.
At 5:20PM the rand was trading at R13.52, before dropping sharply to trade at R13.56 just 10 minutes later.
Also in December last year, Moody’s kept the country’s rating two notches above junk status on its scale.