On Friday, ratings agency Standard & Poors re-affirmed South Africa's credit rating at investment grade BBB- but with a negative outlook. It was a close call as many expected the ratings agency to downgrade South Africa's credit rating to 'Junk.' S&P will be revisiting the credit rating outlook next on December 2016.
The ratings agency decision comes at a crucial time as investor concerns about South Africa's internal policy disputes between President Jacob Zuma and his finance minister, plus the internal dealings of Zuma who is accused of corruption charges. Following the Standard & Poors rating decision, the rand or ZAR strengthened, sending USDZAR to a 2-month low. The rand also gained support from a weaker US dollar which fell after May’s nonfarm payrolls report showed that the US economy added only 38k jobs - leaving investors to trim back the US rate hike decision in June. USDZAR is currently trading at 14.96 after the dollar opened last Monday (May 30th) at 15.86.
Standard & Poors Affirms South African Credit Rating
Andamento del mercato - 06/06/2016