S&P cuts South Africa

Standard & Poor's said it lowered the long-term foreign currency sovereign credit rating on the Republic of South Africa to BBB from BBB+ and the long-term local currency rating to A- from A.

The agency said it also lowered the short-term local currency rating to A-2 from A-1 and affirmed the short-term foreign currency rating at A-2. The outlook remains negative.

The transfer & convertibility assessment is now A-.

In S&P's view, the strikes in South Africa's mining sector will likely feed into the political debate in the run-up to the 2014 elections, which may increase uncertainties related to the African National Congress' future policy framework.

The agency said it also expects that South Africa's underlying social tensions to increase spending pressures and reduce fiscal flexibility for the government.

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