Moody’s cuts China’s credit outlook to negative on growing debt risks
The credit rating agency Moody’s cut its outlook on China’s sovereign credit rating to negative on Tuesday, citing the increasing risks to growth and a property sector crisis in the world’s second-largest economy, per Reuters.
Moody’s downgraded China’s A1 debt rating to “negative” from “stable” less than a month after lowering the US’ remaining triple-A grade from a credit rating agency. This development sends a warning to lenders that the likelihood of a default has grown over the last year.
Market reaction
At the time of press, the AUD/USD pair was up 0.01% on the day at 0.6554.