GOVT REJECTS CREDIT OUTLOOK

6-12-2023

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The Government said it disagreed with Moody's Investors Service's announcement today to change Hong Kong's credit outlook to negative from stable.

Moody's affirmed Hong Kong's long-term issuer rating at Aa3, the fourth highest rating, given the city's significant credit strengths, fiscal buffers and large foreign currency reserves which give it resilience and a significant buffer to weather shocks.

However, Moody’s changed Hong Kong's credit outlook to negative on the grounds of tight linkage of credit profiles with the Mainland and the potential spillovers from the developments in the Mainland.

In a statement, the Government pointed out that Hong Kong's deepening and expanding economic and financial ties with the Mainland should not be a rating constraint. On the contrary, these ties are a source of strength for Hong Kong's long-term development.

It noted that the Mainland economy has immense development resilience and potential, and its long-term bright prospects have remained unchanged.

The deepening and expanding economic and financial ties with the Mainland will continue to be a positive driver supporting Hong Kong’s long-term economic growth, bringing benefits to the local and international businesses operating in the city.

Additionally, the Government pointed out that Moody's made unfounded comments on the high-degree of autonomy of the Hong Kong Special Administrative Region, political and judicial institutions, the implementation of the National Security Law and changes to the electoral system.

Given that the central authorities have reiterated their commitment of upholding the “one country, two systems” in the long run, the core strengths of Hong Kong as an international financial and trade centre will remain, it added.




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