sample.com - foreign currency trading

The U.S.-based international credit rating agency elevated China's foreign currency bond ceiling and rating to A2 from A3, expecting the Chinese government will keep maintaining a strong external payments position to ''provide adequate insulation from underlying domestic pressures and potential external shocks.''

China's foreign currency bank deposit ceiling was moved up to A2 from Baa1, while the short-term ceilings for foreign currency notes and deposits were raised to Prime-1 from Prime-2.

China's rating outlook remains stable, Moody's said.

As for Hong Kong, the agency said it has upgraded the territory's foreign currency country ceilings for bonds and for bank deposits to A1 from A3.

The outlook of the ratings is stable, it said.

The Aa3 domestic currency rating of the Hong Kong government was affirmed, with a stable outlook.

Moody's also raised Macao's foreign currency country ceilings for bonds and bank deposits, as well as the foreign and domestic currency issuer ratings, to A1 with a stable outlook.

In explaining its action, Moody's said China has an exceptionally strong external payments position as its official foreign exchange reserves have a large buildup supported by the country's export performance and its continued ability to attract substantial amounts of foreign direct investment.

The agency also said the Chinese government has maintained a policy of containing external debt ''at a prudent level'' and to minimizing moral hazard risks that could arise from external borrowing by China's banks and state enterprises.

''These factors make even more remote the possibility that the central government would default on its foreign currency bonds,'' Moody's said.

The agency said the ratings of Hong Kong and Macao should be closely linked to those of China, although not necessarily the same, due to their increasing economic integration.

sample.com - foreign currency trading

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