Fitch Ratings Joins S&P In Downgrading South Africa To Junk Status

Fitch Ratings on Friday downgrade South Africa's sovereign rating to BB-plus, placing it in speculative, or "junk" status, due to recent political events including a major cabinet reshuffle. The agency joined Standard & Poor's, which lowered its rating on South Africa to junk earlier this week. "In Fitch's view, the cabinet reshuffle, which involved the replacement of the finance minister, Pravin Gordhan, and the deputy finance minister, Mcebisi Jonas, is likely to result in a change in the direction of economic policy," Fitch wrote in a note. The reshuffle is likely to undermine, or even reverse, progress made on governance of state-owned enterprises, and SOE debt could migrate to the government's balance sheet.