Standard and Poor’s lowers South Africa's long-term foreign currency credit rating

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Ratings agency Standard and Poor’s on Friday lowered South Africa's long-term foreign currency credit rating one notch, from BBB to BBB- minus.

The agency says in a research update the downgrade reflects its expectation of lacklustre gross domestic product growth in South Africa, against a backdrop of relatively high current account deficits, rising general government debt, and the potential volatility and cost of external financing.

According to Standard and Poor’s, BBB means a government has adequate capacity to meet financial commitments, but more subject to adverse economic conditions.

It says BBB-minus, is considered the lowest investment grade by market participants.

The agency says a prolonged strike in the platinum sector, as well as weak domestic and external demand, led GDP to contract in the first quarter of 2014 and is likely to depress second-quarter GDP growth.