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US downgrade to hit Asia-Pacific region's liquidity: S&P

It also warned that the ratings downgrade of US, along with the weakening sovereign credit-worthiness in Europe, were pointing towards "an uncertain and challenging environment".

twitter-logo PTI   New Delhi     Last Updated: August 10, 2011  | 11:30 IST

Standard & Poor's (S&P) on Monday said its downgrade of the United States would have an impact on the exports and liquidity positions of Asia-Pacific economies, but poses no immediate risk to their sovereign ratings.

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Without specifically naming India, the global ratings agency said the potential longer term consequences of a weaker financing environment, slower growth and higher risk aversion were, however, some negative factors for Asia-Pacific sovereign ratings .

It also warned that the ratings downgrade of US, along with the weakening sovereign credit-worthiness in Europe, were pointing towards "an increasingly uncertain and challenging environment ahead".

PERSPECTIVE:What S&P's rating cut means for India?

The agency said since the Asia-Pacific economies are dependent on exports to the US and Europe, some of the nations, like Thailand, Malaysia and Japan, are likely to "experience export-driven slowdown, either through weaker demand or lower export prices, or both."

Late on Friday, global ratings agency S&P downgraded its US sovereign rating to AA+ from AAA, with a negative outlook.

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