Cape Town – South Africa has been downgraded to junk status by Standard & Poor’s following last week's Cabinet reshuffle which saw Finance Minister Pravin Gordhan axed.
The rating agency said on Monday political uncertainty was one of the reasons for the downgrade.
The downgrade followed an emergency meeting of S&P at the weekend after President Jacob Zuma axed Gordhan and his deputy Mcebisi Jonas.
The rating agencies had warned of political risks in the country and S&P was expected to release its results on June 2, but on Monday decided to cut South Africa’s investment status to junk status.
Read the full statement here
Two more ratings agencies, Fitch and Moody’s, are expected to make an announcement on their assessment soon.
There have been a groundswell of objection on Zuma’s decision to axe Gordhan with senior ANC leaders also raising their voice.
The downgrade of South Africa by S&P came after the country escaped a downgrade late last year after the ratings agencies conducted their last review for the year.
However, they warned of political uncertainty and asked the country to get its house in order.