Moody’s downgrades outlook for Hong Kong amid ongoing protest turmoil but city’s rating remains unchanged
- Move follows Fitch’s decision earlier this month to lower city’s rating and outlook, and could mean higher borrowing costs for government
- Financial Secretary Paul Chan disputes decision, saying ratings agency’s rationale is unfounded
Moody’s Investor Service on Monday downgraded the outlook for Hong Kong’s sovereign rating from stable to negative against a backdrop of persistent political stalemate between protesters and the government, but kept the city’s rating unchanged.
Financial Secretary Paul Chan Mo-po criticised the move, saying the rating agency’s rationale was unfounded.
The company became the second of the big three global credit agencies to revise Hong Kong’s credit strengths on political grounds after Fitch Ratings’ decision to lower the city’s rating one notch from AA+ to AA and its outlook from stable to negative earlier this month.
The moves could mean higher borrowing costs for the government and government-backed companies.
Hong Kong’s rating remains at Aa2, Moody’s third-highest ranking.