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S&P cuts US rating over debt situation
The Standard & Poor's credit rating agency
(S&P) has downgraded the United States' triple-A rating by one
notch for the first time in the history of the ratings amid concerns
over the country's debt.
The S&P lowered the US rating from the top AAA to AA+, since the first time the rating agency granted it in 1917, the Associated Press reported. The credit agency said the move was made because the deficit reduction plan passed by the US Congress on Tuesday “did not go far enough to stabilize the country's debt situation.” Credit ratings agencies such as Moody's Investors Service and S&P, had warned Washington on August 3 to reduce its debt-to-GDP ratio quickly, otherwise it would face losing its triple-A rating. On August 4, Wall Street witnessed its worst day in dealing with the financial crisis, as shares tumbled over fears of a new economic meltdown. The decline marked the biggest single-day loss since December 1, 2008. According to the default-preventing compromise bill in the Congress, the US debt ceiling was raised by USD 2.4 trillion, to reach a total of USD 16.7 trillion, just a few hours before the August 2 deadline. JM/HJL/HRF |
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