Moody’s upgrades China, Hong Kong, Macau ratings

HONG KONG, July 26, 2007 (AFP) – International ratings agency Moody’s Investors Service said Thursday it has upgraded its currency ratings for China, Hong Kong and the gambling haven of Macau. It has raised China’s long-term foreign currency bond rating to “A1” from “A2” on the back of the exceptional strength of its external payments position, favorable government debt trends and continued progress in economic reform.

The outlook on the ratings and ceilings is stable, it said.

“China’s very strong external payments position provides insulation from external shocks and allows the authorities time to expand and deepen structural reform,” Moody’s senior vice-president Tom Byrne said.

“Official foreign exchange reserves continue to grow and now exceed 1.3 trillion US dollars and external obligations of the government and state-owned banks are a small fraction of that sum,” he added.

For Hong Kong, Moody’s raised its foreign and domestic currency bond ratings to “Aa2” from “Aa3” to reflect a strengthening of the government’s finances and its external position.

“The Hong Kong government has almost no debt and has large and growing fiscal reserves, equivalent to about one qu