Chinese agency cuts US credit rating

China's leading credit rating agency downgraded the US to 'A' following last week’s announcement of a second round of quantitative easing.

In a report out today, Dagong Global Credit Rating Co says the rating reflects the deteriorating debt repayment capability of the US and drastic decline of the government's intention of debt repayment.

"The serious defects in the United States economic development and management model will lead to the long-term recession of its national economy, fundamentally lowering the national solvency," it says

"The new round of quantitative easing monetary policy adopted by the Federal Reserve has brought about an obvious trend of depreciation of the US dollar, and the continuation and deepening of credit crisis in the US.

"Such a move entirely encroaches on the interests of the creditors, indicating the decline of the US government's intention of debt repayment."

Earlier this year, Dagong published its first sovereign debt ratings, stripping AAA ratings from the UK, US, Germany and France.