Daily Maverick (Johannesburg)

South Africa: Ratings and Sense - Stormy Seas Ahead

analysis

Late last week, two major international ratings agencies pronounced their verdict on South Africa's economic management - and it wasn't a particularly pretty picture they found. J. BROOKS SPECTOR takes a first look at what it may mean for the future.

Last week, Fitch and Standard and Poor's, two of the three major international ratings agencies, took a long, hard look at South Africa's economic circumstances. They weren't especially pleased by what they found, giving the country a lowered economic outlook and lowered bond ratings for South Africa respectively. Ouch.

As the Wall Street Journal reported on the decisions, "Standard & Poor's Ratings Services cut South Africa's foreign and rand-denominated debt ratings by one notch each, to BBB- and BBB+, respectively, putting the country just above so-called junk-bond status. Meanwhile, Fitch Ratings cut its outlook for the country to negative, a move that indicates the rating firm could be leaning toward a downgrade of the country's debt later this year. Fitch rates South Africa's foreign-currency debt BBB, on par with S&P before Friday's cut. Moody's Investors Service, the third major ratings company, still maintains a Baa 1, several notches above junk grade." Previously, all three rating agencies had last downgraded...

Ads by Google

Copyright © 2014 Daily Maverick. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.