International ratings agency, Standard & Poors announced on Thursday that it has revised Hong Kong's long-term local currency rating to negative, citing the jurisdiction's narrow tax base and weak property prices as important factors in this decision.
'Hong Kong's current budget position is strained,' S&P's associate director, Ping Chew explained in a statement released yesterday.
Standard & Poors announced that future ratings will depend on the ability of the SAR authorities to tackle the ballooning budget deficit, whilst at the same time managing to maintain a well-balanced macroeconomic policy mix.
However, speaking to the Wall Street Journal, Hong Kong Monetary Authority (HKMA) chief executive, Joseph Yam was pragmatic about the agency's decision to revise its outlook.
'I don't think we are under any serious threat at all about monetary stability,' Mr Yam commented, reiterating: 'I don't think the negative outlook is something we have to worry about that much.'
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