Moody's Investors Service on Thursday announced that it had upgraded the foreign and domestic currency bond ratings of the Hong Kong Special Administrative Region (HKSAR) government to Aa2 from Aa3 to reflect a strengthening of the government's finances and its external position.
"The HKSAR government has almost no debt and large and growing fiscal reserves, equivalent to about one quarter of GDP," said Moody's Vice President Steven Hess.
"This strong position gives the government considerable financial flexibility and provides a strong buffer against potential shocks emanating from the mainland or elsewhere," he said.
Not only is the government's position strong, said Hess, but the HKSAR as a whole has a large and growing international asset position. Consistently large current account surpluses have enabled Hong Kong corporations, banks, and the government to build up one of the strongest net international investment positions in the world, providing yet another buffer against possible shocks.
Welcoming the news, HKSAR Financial Secretary John Tsang said the upgrade reflected international recognition of Hong Kong's strong economic fundamentals.
"Hong Kong has now achieved AA ratings for its foreign-currency and local-currency obligations by all major international credit rating agencies, the highest that has ever been assigned to Hong Kong," he said.
"I am pleased to note Moody's recognition that Hong Kong's economic and financial resilience to unforeseen external developments has grown over the past several years," he said.
"Our robust systems as well as large and growing fiscal reserves and international asset position will continue to provide buffer to Hong Kong to withstand potential external shocks. We are also confident that Hong Kong's economy would continue to benefit substantially from the trade and financial links with the Mainland, " Tsang added.
Source: Xinhua
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