The South African rand weakened today as Standard & Poor’s reduced South Africa’s credit rating, following the wave of strikes in the country’s mining sector that may hurt the struggling African economy.
S&P cut South Africa’s credit rating from BBB+ to BBB. The rating agency explained:
The strikes in South Africa’s mining sector will likely feed into the political debate in the run-up to the 2014 elections.
Additionally, S&P expects “that South Africa’s underlying social tensions will increase spending pressures and reduce fiscal flexibility for the government”. The agency predicted that nation’s economic growth will soften and account deficit will widen.
USD/RUB rose from 8.7621 to 8.8032 as of 13:44 GMT today.
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