South African local currency debt was downgraded to “junk” territory by S&P Global Ratings on Friday. The company cited a further deterioration in the country’s economic outlook and public finances. However, the decision to place South Africa on review for a downgrade may have prevented a larger sell-off in the currency. S&P’s downgrade comes after Finance Minister Malusi Gigaba shocked markets in october by flagging weaker growth expectations, rising government debt, and a wider budget deficit.
