As Jacob Zuma faces backlash over the sacking of ex-finance minister Pravin Gordhan, agency cuts country’s rating grade.

Credit rating agency Standard and Poor’s (S&P) has downgraded South Africa’s rating to junk status, as the country’s currency continued to slide following a major cabinet reshuffle.

In an unscheduled review that prompted a sell-off in South African assets, S&P on Monday cited the impact of divisions in the government of President Jacob Zuma that led to leadership changes, including the departure of former Finance Minister Pravin Gordhan.

South Africa: Protests erupt after President Zuma sacks ministers

“This has increased the likelihood that economic growth and fiscal outcomes could suffer,” said S&P, which cut its rating by one notch to BB+ – its highest non-investment grade mark – and also assigned Africa’s most industrialised economy a negative outlook.

The rand, which has fallen three percent against the US dollar since the Friday night shake-up, tumbled further after the downgrade.

S&P also said that “political risks will remain elevated this year, and that policy shifts are likely, which could undermine fiscal and economic growth”.

Following S&P’s announcement, South Africa’s Treasury expressed its commitment to a responsible fiscal path.

“South Africa is committed to a predictable and consistent policy framework, which responds to changing circumstances in a measured and transparent fashion,” it said in statement.

Moody’s, another ratings agency which has South Africa two notches above “junk” status, is expected to deliver a review on Friday.

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