Moody's raises China's bond rating

08:43, November 12, 2010      

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Moody's Investors Service Inc. announced Thursday that it has lifted the Chinese government's bond ratings to Aa3 from A1, and maintains a positive outlook to the country's economy.

The country's ratings of the government's foreign and local currency bonds; ceilings for foreign and local currency bank deposits, and the ceilings for foreign and local currency bonds have all been raised, according to the report.

The report said that it decided to raise the ratings because after the financial crisis, China's economy has shown a strong recovery performance; and that the company believes it will maintain doing so.

According to Moody's, the Chinese government took rapid and effective stimulus measures after the financial crisis and now has begun to withdraw. Also, the central government's financial credit fundamentals were not eroded, and it may possibly effectively control the problems that were brought by the expansion of the loans in 2009.

Moody's emphasized that China's international balance is especially strong, which largely helps the country to tackle the fluctuation in the global financial market; and capital control can help stem destabilizing capital inflows. Moody's also predicted that the dispute on trade and currency between China and the US will be effectively solved.

Source: Global Times


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