S & P Affirms China's Foreign Currency RatingsRatings agency Standard and Poor's affirmed China's foreign currency and credit ratings Thursday, citing the country's strong liquidity and moderate external debt burden.The agency affirmed China's BBB long-term and A-3 short-term foreign currency sovereign and senior unsecured credit ratings and said the outlook for the long-term rating is stable. China's ratings are underpinned by a strong external position, S and P said. The country's external debt is likely to decline to 66 percent of exports in 2000 compared with 88 percent in 1995, and continued strong inflows of investment and rising export growth will likely sustain high levels of foreign exchange reserves in the coming years, the agency added. China's foreign exchange reserves stood at US$156.8 billion at the end of March. S and P cited China's commitment to economic reform and financial restructuring in the face of rising unemployment as another positive factor underpinning the stability of the ratings. However, the agency warned that the government's high domestic debt burden, which was built up partially through policy-directed loans funneled through commercial banking system and in part through debt issues, is a negative factor for the currency and debt rating's stability over the long-term. |
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