Fitch downgraded Hong Kong’s sovereign rating one notch from AA+ to AA and the city’s outlook from stable to negative on Friday amid persistent protests in the city. The move will have implications for the borrowing costs of companies and the government.
The credit-rating agency says ongoing events have inflicted long-lasting damage to international perceptions of the quality and effectiveness of Hong Kong’s governance system and rule of law. It also called into question the stability of its business environment.
The decision was rebuked by Chief Executive Carrie Lam Cheng Yuet-ngor, who said “what happened in the past few months did not undermine ‘one country, two systems’ [principle] at all.”
It is Hong Kong’s first downgrade in rating by Fitch since 1995. The latest rating still signifies the third highest investment grade.