Hong Kong, Jan 21 (IANS) Credit rating agency Moody’s on Tuesday downgraded Hong Kong’s long-term issuer and senior unsecured ratings saying that the government has failed to tackle massive protests that broke out in June 2019 and have pushed the city into recession.
In a statement, Moody’s said that it was lowering Hong Kong’s rating from “Aa2” to “Aa3” – the lowest of the three “Aa” levels, which are given to financial obligations judged to be “of high quality” and “subject to very low credit risk”, reports Efe news.
The downgrade, the firm said, arises out of a concern for the institutions of the city, a reduction in the strength of the local administration and “more significant constraints” on the autonomy of Hong Kong with respect to mainland China than previously believed.
Moody’s rued an “absence of tangible plans to address either the political or economic and social concerns of the Hong Kong population” in the last nine months, which, it added, “may reflect weaker inherent institutional capacity” than the New York-based agency had assessed earlier.
Following the release of the report, the government issued a statement on Tuesday in which it said it “strongly” disagreed with and was “deeply disappointed” by Moody’s decision to lower the city’s rating.
This is the first time since May 2017 that Moody’s has downgraded Hong Kong’s rating.
Hong Kong has been gripped by more than seven months of social unrest sparked by opposition to draft legislation that would have allowed the extradition of suspects to mainland China, among other jurisdictions.
The protests have developed into a broader anti-government movement with demands including restarting the city’s stalled political reform process.
Demonstrations have repeatedly ended in clashes between anti-government protesters and police.