Financial Secretary Paul Chan has downplayed the recent downgrade of Hong Kong's credit rating to AA+ from AAA by Standard and Poors, saying the move will have a limited long-term economic impact on the territory, reports LowTax.
S&P downgraded Hong Kong's long-term credit rating on September 20 following its decision to downgrade Mainland China's. "Strong institutional and political ties exist between China and Hong Kong, arising from the latter's status as a special administrative region of China," said the ratings agency. "Consequently, we view a weakening of credit support for China as exerting a negative impact on the ratings on Hong Kong beyond what is implied by the territory's currently strong credit metrics."
There are fears that the downgrade could increase funding costs for Hong Kong businesses.
However, Financial Secretary Paul Chan said there is no cause for concern. "Of course we do not agree with the downgrading, nor do we think this will affect our economy or even long-term prospects, so we believe we do not need to worry about this," he told reporters.