China’s leading credit rating agency Wednesday downgraded U.S. sovereign debt after putting it on negative watch last month. The Dagong Global Credit Rating Company, which lowered the United States to A+ last November after the U.S. Federal Reservedecided to continue loosening its monetary policy, announced a further downgrade to A, on par with Russia and South Africa, saying the deal to lift the debt ceiling won’t solve underlying US debt problems or improve its debt-paying ability over the long run.
Ironically, Dagong’s move could hurt not just the United States but also China, the largest foreign owner of U.S. debt with holdings worth almost $1.2 trillion. (3 August 2011, Wednesday)