Moody's Cuts South Africa's Credit Rating

By Gabriele Steinhauser Features Dow Jones Newswires

Moody's Investors Service on Friday cut South Africa's credit rating to Baa3, one notch above junk, and gave it a negative outlook.

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The downgrade follows cuts to the country's creditworthiness by Fitch Ratings and S&P Global Ratings in April, in the wake of President Jacob Zuma's shock dismissal of his finance minister and several other cabinet members.

"Recent political developments suggest a weakening of the country's institutional strength," Moody's said, pointing to the cabinet reshuffle among other developments.

Those, it warned, would make it harder for Africa's most developed economy to start growing again and to stabilize its debt levels.

Earlier this week, South Africa's statistics agency said the country entered a technical recession in the first quarter.

Write to Gabriele Steinhauser at gabriele.steinhauser@wsj.com

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(END) Dow Jones Newswires

June 09, 2017 17:33 ET (21:33 GMT)