LONDON, Nov 13 (Reuters) - The cost of insuring South African debt hit a four-month high on Monday, as scandal-plagued power firm Eskom warned it was in financial trouble and worries swirled about the country’s remaining investment grade credit ratings.
South Africa’s 5-year credit default swaps rose 5 basis points from Friday’s close, according to data from IHS Markit. It left the contract at its highest since early July at 214 bps and close to hitting a mid-April high.
South Africa’s power utility Eskom said on Monday it was not insolvent but was facing serious liquidity issues and would be in “trouble” if the situation persisted.
South Africa’s Treasury said its Deputy Director-General, Michael Sachs, had also resigned. Local media outlet Fin24 reported Sachs had quit last week complaining that President Jacob Zuma was interfering in the budget process.
A presidential commission report released on Monday recommended that South Africa should raise spending on higher education and training to 1 percent of gross domestic product from 0.75 percent at present. (Reporting by Karin Strohecker and Marc Jones; Editing by Saikat Chatterjee)