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HK credit market stable despite Moody's downgrade



The Hong Kong Association of Banks (HKAB) has assured stability in Hong Kong's credit market despite Moody's downgrade of the SAR and mainland China. HKAB Chairman Sun Yu highlighted that credit spreads between mainland and Hong Kong institutions show no significant changes. He emphasised that the Hong Kong banking sector's services will continue without major disruptions. Sun also pointed out that, although high interest rates and geopolitical tensions have dampened borrowing, strengthening connections with the Greater Bay Area could increase financing needs, presenting an opportunity for the industry. Contrasting Moody's decision, Fitch Ratings maintains its current outlook for Hong Kong and mainland China. However, James McCormack, Fitch's Managing Director and Global Head of Sovereign and Supranational Ratings, anticipates slower growth in Hong Kong.


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