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The Government today (July 27) welcomed Standard & Poor's (S&P's) decision to upgrade its foreign and local currency ratings on Hong Kong to "AA" from "AA-", with stable outlooks. This is the highest rating that S&P has ever assigned to Hong Kong.
S&P attributed the ratings upgrade to Hong Kong's strong economic fundamentals, the Government's exceptional financial position, and large net external creditor position. S&P also said that the upgrade in Hong Kong's foreign and local currency ratings was linked to the upgrade of China's foreign and local currency ratings to "A" from "A-", pointing out that the improved credit fundamentals of China has reduced the likelihood of potential negative developments in China spilling over to Hong Kong.
The Financial Secretary, Mr Henry Tang, welcomed S&P's rating upgrade. "The upgrade confirms that Hong Kong's improved fiscal position and sound economic fundamentals deserve a much higher rating. It is also recognition of the continued strength of China's economic performance and the overall strengthening of its creditworthiness. Hong Kong will continue to capitalise on the opportunities arising from China's rapid growth," he said.
"On the fiscal front, the Government remains committed to fiscal discipline and to stability of public finances. To that end, we have just launched a nine-month public consultation on tax reform and broadening of the tax base," Mr Tang said.
S&P last raised Hong Kong's foreign and local currency rating outlooks to "positive" from "stable" in April 2006.
S&P last upgraded Hong Kong's long-term foreign currency rating to "AA-/stable" from "A+/positive" in July 2005.
Ends/Thursday, July 27, 2006
Issued at HKT 15:50
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