Fitch affirms South Africa’s “junk” rating, outlook stable

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The Fitch Ratings logo is seen at their offices at Canary Wharf financial district in London,Britain, March 3, 2016. REUTERS/Reinhard Krause

JOHANNESBURG – Ratings agency Fitch affirmed South Africa’s sub-investment grade rating on Thursday with a stable outlook, warning weak economic growth remained a key risk.

Fitch downgraded South Africa to BB+ from BB- on both foreign and local currency debt in early April after a cabinet reshuffle that saw respected finance minister Pravin Gordhan dismissed.

“South Africa’s ratings are weighed down by low trend GDP growth, sizeable contingent liabilities and deteriorating governance,” Fitch said in a statement.

“Positively, they are supported by deep local capital markets, a favourable government debt structure and a track record of fairly prudent fiscal and monetary policy.”

 

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