Home › Business › Business News
Thursday, 17 October 2013
A person leaving the House side of the US Capitol Building after a vote on Capitol Hill Oct 16, 2013 in Washington, DC. Chinese ratings agency Dagong says the fundamental situation in the US remains unchanged with the debt growth rate still significantly outpacing fiscal income and GDP staying unchanged. Old debts are also still being repaid through raising new debts, it explains - AFP Photo.
BEIJING: A Chinese ratings agency downgraded its US sovereign credit rating Thursday despite Washington's resolution of the debt ceiling deadlock, warning that fundamentals for a potential default remained "unchanged".
Dagong lowered its ratings for US local and foreign currency credit from A to A-, maintaining a negative outlook, the agency said in a statement.
The announcement came after the US Congress passed and President Barack Obama signed a bill that extends the nation's borrowing authority and ends a two-week government shutdown.
"The fundamental situation that the debt growth rate significantly outpaces that of fiscal income and gross domestic product remains unchanged," Dagong said in the statement, adding Washington's solvency was vulnerable as old debts were still repaid through raising new debts.
"Hence the government is still approaching the verge of default crisis, a situation that cannot be substantially alleviated in the foreseeable future," it said.
Dagong made headlines in August 2011 when it lowered its main rating for US sovereign debt after Congress passed an earlier bill to raise Washington's debt ceiling.
The agency, which is far less prominent than long-established Western competitors including Moody's, Fitch and Standard and Poor's, has been working to further raise its profile.
China's official news agency Xinhua said Thursday in a bylined commentary that US politicians had held the rest of the world hostage in the crisis.
But Beijing welcomed the agreement, saying it will contribute to global economic stability – AFP.
Lenovo closes deal to buy Motorola from Google
Sprint's CEO faces mounting challenges to turn company around
Samsung seeks China comeback with first metallic smartphones
Alibaba plays trademark card to protect lead as "Single's Day" spree nears
Tencent teams up with IBM to offer business software over the cloud
China’s Alibaba plans to invest more in India
Drama at Protasco EGM, new twist in boardroom tussle
Brahim's invests RM95mil in Burger King franchise
Maybank clinches ACCA MaSRA trophy for 2nd consecutive year
Umno AGM: Make Mandarin and Tamil compulsory in national schools, says delegate
After records, Messi can focus on silverware
Copyright © 1995-2014 Star Publications (M) Bhd (Co No 10894-D)