The South African rand was down today as Fitch Ratings changed outlook for South Africa’s sovereign credit rating to negative, reducing attractiveness of country’s assets to investors.
South Africa’s BBB+ rating is in danger as Fitch hinted that a rating cut may occur. The rating agency explained the change of the outlook by inability of the government to improve employment and the resulting pressure on public finances. Fitch said that negative outlook “reflects the limited progress on several long-standing structural issues”. Analysts were somewhat surprised by the market reaction as usually changes to outlook haven’t such a big impact as changes to ratings themselves.
USD/ZAR was up from 8.0240 to 8.1280 as of 18:05 GMT today and touched the daily maximum of 8.2010 earlier.
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