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HomeeconomyChina EconomyChinese agency first to downgrade US credit rating as debt-ceiling concerns widen

Chinese agency first to downgrade US credit rating as debt-ceiling concerns widen

EconomyChina Economy

US debt-ceiling: Chinese agency first to downgrade US credit rating, after Fitch warning

Move by China Chengxin International Credit Rating points to US inflation and ‘intensification of political divisions’ in debt-ceiling stand-offSovereign rating declines can raise short-term borrowing costs for taxpayers, but move by Chinese agency seen as mostly symbolic, reflecting domestic market worriesBanking & financeMia NulimaimaitiPublished: 5:05pm, 26 May, 2023Why you can trust SCMP

A leading Chinese agency on Thursday downgraded its sovereign credit rating of the United States amid the debt-ceiling crisis, reflecting growing market concerns in China, the second-largest holder of US Treasury bills.

China Chengxin International Credit Rating (CCXI), in which US ratings giant Moody’s holds a minority stake, downgraded it by one notch to AAg+ from AAAg, citing high inflation and the widely watched debt-ceiling stand-off.

“The intensification of political divisions between the two parties in the United States has increased the difficulty of resolving the debt-ceiling issue,” CCXI said in an online statement.

It added that the political wrangling was likely to result in a delayed payment by the so-called X-date – the day the US government says it can no longer fulfil all its financial obligations

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