Fitch downgrades Hong Kong after months of protests

Fitch downgrades Hong Kong after months of protests

A news conference of Hong Kong's Chief Executive Carrie Lam is televised in Hong Kong
A news conference of Hong Kong's Chief Executive Carrie Lam is televised in Hong Kong, China, September 4, 2019. REUTERS/Kai Pfaffenbach

HONG KONG: Global credit rating agency Fitch Ratings on Friday (Sep 6) downgraded Hong Kong's long-term foreign currency issuer default rating to "AA" from "AA+" following months of unrest and protests in the Asian financial hub.

Hong Kong's rating outlook is negative, Fitch Ratings said in its statement.

The massive, and sometimes violent protests have roiled the financial center as thousands chafe at a perceived erosion of freedoms and autonomy under Chinese rule.

READ: Our coverage of the Hong Kong protests

Fitch said it expects the "one country, two systems" framework to remain intact, but added that public discontent is likely to persist despite recent concessions to certain demands by protesters.

The rating agency said it expects Hong Kong's financial buffers to remain intact, although it anticipates that the region's revenue will underperform budget forecast.

The rating downgrade comes as Hong Kong is bracing for more demonstrations this weekend, with protesters threatening to disrupt transport links to the airport, after embattled leader Carrie Lam's withdrawal of a controversial extradition Bill failed to appease some activists.

The extradition Bill, which would have allowed people to be sent to mainland China for trial in courts controlled by the Communist Party, triggered mass protests that have now evolved into a broader backlash against the Hong Kong government and its political masters in Beijing.

READ: Hong Kong braces for weekend protests as Carrie Lam fails to appease activists

The anti-government protests began in March amid fears that Beijing is eroding the autonomy granted to Hong Kong when it was handed back to China in 1997.

Many Hong Kong residents fear Beijing is eroding the autonomy granted to the former British colony when it was handed back to China in 1997.

China denies the charge of meddling and says Hong Kong is an internal affair. 

It has denounced the protests and warned of the damage to the economy and the possible use of force to quell the unrest. Hong Kong is facing its first recession in a decade.

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Source: Reuters/nc

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