Global credit rating agency Fitch Ratings on Friday downgraded Hong Kong’s long-term foreign currency issuer default rating to “AA” from “AA+” following months of unrest and protests in the Asian financial hub.
Hong Kong’s rating outlook is negative, Fitch Ratings said in its statement.
The massive, and sometimes violent protests have roiled the financial center as thousands chafe at a perceived erosion of freedoms and autonomy under Chinese rule.
Fitch said it expects the “one country, two systems” framework to remain intact, but added that public discontent is likely to persist despite recent concessions to certain demands by protesters.
The rating downgrade comes as Hong Kong is bracing for more demonstrations this weekend, with protesters threatening to disrupt transport links to the airport, after embattled leader Carrie Lam’s withdrawal of a controversial extradition bill failed to appease some activists.
The anti-government protests began in March amid fears that Beijing is eroding the autonomy granted to Hong Kong when it was handed back to China in 1997. China denied the charge of meddling and said Hong Kong is an internal affair.
The rating agency said it expects Hong Kong’s financial buffers to remain intact, although it anticipates that the region’s revenue will underperform budget forecast.