South Africa:Rating on thin ice
摘要： StandardandPoor’s(S&P)willannounceonFridaywhetheritisdowngradingSouthAfrica’slong-termforeign-curren
Standard and Poor’s (S&P) will announce on Friday whether it is downgrading South Africa’slong-term foreign-currency credit rating to sub-investment grade, as many have speculated.
We think S&P will give South Africa the benefit of the doubt for now, affirming its long-termforeign-currency rating at BBB-, with a negative outlook. Its next review is in December.
S&P is likely to give a clear warning that, without better policy formation and implementation,a downgrade to junk remains on the cards, however.
South Africa’s significant political ‘tail risk’ is also likely to play a major role in S&P’s decisionto maintain its negative outlook.
There is a risk of a one-notch cut in the local-currency rating to BBB from BBB+ on Friday,but this is unlikely to spark panic, as the local-debt investment-grade status is not in peril.
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