- May 24, 2017
- Posted by: admin
- Category: Daily News
- Moody’s Investors Service cut its rating on China’s debt, saying that the outlook for the country’s financial strength will worsen as debt rises and economic growth slows.
- Moody’s reduced the rating to A1 from Aa3 and changed the outlook to stable from negative, the company said in a statement on 24 May 17. The offshore yuan extended losses after Moody’s downgrade, weakening 0.12% to 6.8889 per dollar as of 8:24 a.m. in Shanghai.
- President Xi Jinping and other top leaders are seeking to rein in credit risks in the financial system, while ensuring there’s enough lending to keep the economy humming above their target for economic growth of at least 6.5% in 2017. Total outstanding credit climbed to about 260% of GDP by the end of 2016, up from 160% in 2008, according to Bloomberg Intelligence.
- The Australian dollar fell as much as 0.31% after the announcement about its largest trading partner.
- “While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government,” Moody’s said.