SA downgraded to junk status

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SA downgraded to junk status

S&P Global Ratings cut South Africa’s sovereign credit rating to junk status on Monday. The country was‚ until now‚ rated by S&P at “BBB-”‚ with a negative outlook‚ the lowest possible investment-grade rating. Jacob Zuma’s firing of respected finance minister Pravin Gordhan and his deputy Mcebisi Jonas saw the yields on the government’s benchmark 10-year R186 bonds surge from 8.355% to 8.84% on Monday.

Zuma’s firing of respected finance minister Pravin Gordhan and his deputy Mcebisi Jonas saw the yields on the government’s benchmark 10-year R186 bonds surge from 8.355% to 8.84% on Monday. The yield on the R186 bond spiked at 10.4% on December 11 2015 when Zuma caused chaos by appointing Des van Rooyen as finance minister before bringing Gordhan back into the job to calm markets.

An economist said most citizens were unlikely to feel a big impact immediately.

But the downgrade could in the longer term lead to higher interest rates‚ making it harder for families to pay for vehicles and their home loans.

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