Home' Trinidad and Tobago Guardian : October 17th 2013 Contents WASHINGTON---The Fitch credit
rating agency has warned that it is
reviewing the US government s
AAA credit rating for a possible
downgrade, citing the impasse in
Washington that has raised the
threat of a default on the nation s
Fitch placed the US credit rating
on negative watch Tuesday, a step
that would precede an actual down-
grade. The agency said it expects to
conclude its review within six
The announcement comes as
House and Senate leaders face a
Thursday deadline to raise the
nation s $16.7 trillion borrowing limit.
Fitch says it expects the debt limit
to be raised soon. But it adds, "the
political brinkmanship and reduced
financing flexibility could increase
the risk of a US default."
A Treasury Department
spokesman said Fitch s announce-
ment "reflects the urgency with
which Congress should act to remove
the threat of default hanging over
Fitch is one of the three leading
US credit rating agencies, along with
Standard & Poor s and Moody s
S&P downgraded US long-term
debt to "AA+" in August 2011. But
three months ago, it raised its out-
look. That was in part because of
tax increases and spending cuts that
have helped shrink the budget deficit.
S&P has said it s unlikely to change
its rating because of the debt-limit
Moody s said last week that even
if Congress failed to raise the limit
by Thursday, Treasury could make
its interest payments ahead of other
bills, "leaving its creditworthiness
Fitch took a dimmer view. It said
Treasury might not be able to pri-
oritize its interest payments. "It is
unclear whether it even has the legal
authority to do so," Fitch said.
A credit rating is an assessment
of how able a country or company
is to repay the money it s borrowed.
A AAA rating lets companies and
governments borrow at super-low
So far, most investors have
remained confident in US debt,
though rates have risen on short-
term Treasury bills and shot up as
Congress deadline neared. In a rare
move, Fidelity Investments and JP
Morgan Chase said last week that
they had purged their money market
funds of all US bills that come due
soon after this week.
Still, rates have remained stable
on longer-term debt, like the bench-
mark 10-year Treasury note. That
shows that investors remain confi-
dent in longer-term Treasurys. The
rate on the 10-year note is important
because it affects rates on mortgages
and many other loans. (AP)
Guardian www.guardian.co.tt Thursday, October 17, 2013
Applications will be accepted from ten (10) working days prior to the auction date. The
deadline for submission of tenders to the Domestic Market Operations Department of the
Central Bank is 12:00 noon on the auction date.
Central Bank of Trinidad
and Tobago and must accompany each tender. Cheque payments must be submitted no later
than three (3) working days prior to the auction date.
Competitive tenders can be submitted for any amount up to the issue size and must state the
price the bidder is willing to pay for each $1,000 of the face value being applied for. Competitive
bids may be rejected if the face value of the entire issue is allocated at higher bid prices or if
made to a bid that is rejected.
bidder agrees to accept the weighted average price of the successful bids determined in the
For competitive tenders, payments must be in the amount of the total cost of the bills; for
non-competitive tenders, payments will be equivalent to the face value being applied for.
The Central Bank of Trinidad and Tobago invites tenders
from the public for the following issue:
TREASURY BILL AUCTION
Central Bank of
Trinidad & Tobago
Results of Tender for Treasury Bill numbers 1397 and 1401:
www.central-bank.org.tt/content/treasury-bills or call
28.10.13 30.10.13 29.01.14
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LONDON---Official figures show
Britain s unemployment rate
dropped slightly to 7.7 per cent
for the three-month period to
August, further evidence that
Europe s third-largest economy
continues to strengthen.
The Office of National Statistics
said Wednesday that the number
of those out of work dropped 0.1
percentage points from the three-
month period through May. In
total, there were 2.49 million
unemployed people aged 16 and
over, down 18,000 from the pre-
The unemployment rate is now
a key economic indicator for the
Bank of England---under its new
governor, Mark Carney, the bank
has said it won t consider raising
interest rates until the jobless rate
drops to 7 per cent.
The bank s main interest rate
has been at a record low of 0.5 per
cent since March 2009. Policy-
makers have also refrained from
adding more stimulus, after having
pumped 375 billion pounds ($600
billion) into the economy through
a bond-buying programme.
Chris Williamson, the chief
economist of Markit.com, says
Wednesday s figures add to evi-
dence that a hike in interest rates
could come before 2016, when
most analysts suggest the rate
would be at Carney s target.
"The worry is that any hike in
interest rates before real incomes
start to revive would set the eco-
nomic recovery back significantly,
as rising demand for staff is still
not feeding through to higher
wages," Williamson said.
He noted that pay growth con-
tinues to run well below infla-
tion---which stands at 2.7 per cent,
"meaning incomes continue to fall
in real terms, as they have done
continually since late-2009." (AP)
UK unemployment dips to 7.7 per cent in August
Fitch puts US credit rating on negative watch
Specialist Frank Masiello watches a television monitor on the floor of the New York Stock Exchange showing a
Washington news conference by House Speaker John Boehner. Leaders in the House of Representatives and
Senate were at the time negotiating separate but similar plans to reopen the US government and prevent a
default on American debt that economists said could tip the global economy back into recession.
So far, most investors have
remained confident in US
debt, though rates have
risen on short-term
Treasury bills and shot up as
Congress' deadline neared.
In a rare move, Fidelity
Investments and JP Morgan
Chase said last week that
they had purged their
money market funds of all
US bills that come due soon
after this week.
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