12:19 - 25.05.2023

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May 25, Fineko/abc.az. Fitch Ratings has placed the United States' 'AAA' Long-Term Foreign-Currency Issuer Default Rating (IDR) on Rating Watch Negative, in connection with the delay in negotiations on the matter of country's state borrowing limit.

ABC.AZ reports that the Rating Watch Negative reflects increased political partisanship that is hindering reaching a resolution to raise or suspend the debt limit despite the fast-approaching x date (when the U.S. Treasury exhausts its cash position and capacity for extraordinary measures without incurring new debt).

“Fitch still expects a resolution to the debt limit before the x-date. However, we believe risks have risen that the debt limit will not be raised or suspended before the x-date and consequently that the government could begin to miss payments on some of its obligations. The brinkmanship over the debt ceiling, failure of the U.S. authorities to meaningfully tackle medium-term fiscal challenges that will lead to rising budget deficits and a growing debt burden signal downside risks to U.S. creditworthiness, the agency says.

US Treasury Secretary Janet Yellen reiterated on Wednesday that her department's resources are likely to run out in early June without raising the government borrowing ceiling.

Kevin McCarthy, Speaker of the House of Representatives of the U.S. Congress, expressed optimism that White House and Republican negotiators would reach a deal in time to avert a potentially catastrophic US default, and will be able to agree on the issue of the debt limit until June 1.

“I still think we have time to get an agreement, and get it done,” McCarthy said after the meeting concluded.