Sunday, August 7, 2011

World discards dollar: Chinese rating co.

Dagong Global Credit Rating Company's chairman Guan Jianzhong

Source: Press TV

Amid gloomy prospects for the United States creditworthiness, China's top ratings agency says the world is gradually disposing of the dollar as its reserve currency.

Dagong Global Credit Rating Company's chairman Guan Jianzhong said the US dollar is “gradually discarded by the world” and the “process will be irreversible,” CNBC reported on Sunday.

Earlier in the week, the firm slashed the US credit rating from A+ to A, casting doubt on whether the federal government is capable of repaying its USD 14.3 trillion public debt in the long term.

The agency's move came after interminable infighting in the US Congress over raising of the country's debt limit brought the country within an inch of defaulting on the debt.

“I think the most pressing issue facing the US at the moment is to reflect on the crisis which happened in relation with the debt ceiling," Jianzhong stated.

"They should get a clear understanding that the continuous decline of the debt service capability will inevitably result in the outbreak of a sovereign debt crisis,” he noted.

Officials in Beijing say a failure by Washington to control its massive debt could put the lives of millions of families within and beyond the US borders in danger.

Dagong downgraded the US ratings from AAA to A+ in November after the US Federal Reserve loosened its monetary policy

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