S&P downgrades South Africa's sovereign debt ratings

Standard&Poor's downgraded its rating on the Republic of South Africa's long-term debt after its president removed the country's finance minister from his post.

The ratings agency cut the country's foreign currency-denominated sovereign debt rating from BBB- to BB+, and that for debt issued in the local currency, the rand, from BBB to BBB-.

BBB- is the lowest investment grade rating available from S&P.

As a result of President Zuma's executive changes, analysts at the ratings agency assessed that the contingent liabilities to the state were rising.

They attached a 'negative' outlook to their ratings, meaning that further downgrades were more likely than upgrades in the near future.

"The negative outlook reflects our view that political risks will remain elevated this year, and that policy shifts are likely, which could undermine fiscal and economic growth outcomes more than we currently project."

As of 1720 GMT the US dollar was trading 2.17% higher versus the rand to 13.71.