Fitch's decision to upgrade HK's rating outlook welcomed
(Xinhua)
Updated: 2006-07-25 14:02
The Government of the Hong Kong Special Administrative Region (HKSAR) Tuesday
welcomed Fitch's decision to upgrade its long-term foreign currency rating
outlook on Hong Kong to "Positive" from "Stable".
At the same time, Fitch also affirmed Hong Kong's long-term foreign currency
rating at "AA-" and long-term local currency rating at "AA+" with a stable
outlook.
In its press statement announcing the rating decision, Fitch attributed the
upgrade in outlook to Hong Kong's strong external financial position, continued
improvements in public finances, the Government's commitment to addressing
structural fiscal issues and reduced exposure to the Chinese mainland risks.
Fitch acknowledged that Hong Kong's current account surplus, at 11.4 percent
of GDP in 2005, and Hong Kong's international reserves, at 3.8 months of
currency external payments, are far better results than that of the "AA" median.
Financial Secretary of the Government of the HKSAR Henry Tang said that the
upgrade reflected international recognition of Hong Kong's improved public
finances and growth prospects.
He added that the Government would continue to exercise fiscal discipline and
to explore ways to broaden the tax base.
"We note the concerns expressed by Fitch for the potential risks related to
the fact that Hong Kong is part of China. We hope that the solid track record in
the strict adherence to the 'one country, two systems' principle will convince
international credit rating agencies to accord us a higher rating that is in
line with our economic fundamentals," Tang noted.
Fitch last affirmed its foreign currency sovereign rating on Hong Kong at
"AA-" in May 2005. It last raised Hong Kong's rating outlook to "Stable" from
"Negative" in May 2004.
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