Ratings agency S&P has moved to downgrade South Africa to sub-investment grade on Monday to reflect its view that the divisions in the ANC-led government have led to changes in the executive leadership.

The decision follows a Cabinet reshuffle at midnight on Friday which claimed the jobs of Finance Minister Pravin Gordhan and his deputy Mcebisi Jonas.

The rand reacted immediately to trade at R13.71/$. By 17:53 it changed hands at R13.67 to the greenback.

S&P said the executive changes initiated by President Jacob Zuma have put at risk fiscal and growth outcomes.

“We assess that contingent liabilities to the state are rising,” the global ratings agency said in a statement on Monday.

- Additional reporting Reuters