RPT-Fitch: US Debt Limit Deadline Back in Focus

http://www.reuters.com/article/2014/02/05/fitch-us-debt-limit-deadline-back-in-foc-idUSFit68979620140205

Also important in Fitch's view is the avoidance of short-term uncertainties about Congressional intentions on raising the limit. As we have said previously, repeatedly casting uncertainty over the full faith and credit of the US risks undermining confidence in the role of the US dollar, having a detrimental effect on the economy, and is not a characteristic typical of a 'AAA' sovereign. Having the world's preeminent reserve currency affords the US government incomparable financing flexibility and is a key reason why the US 'AAA' rating can tolerate a higher level of public debt than other 'AAAs'.

The next scheduled review of the US rating is Friday March 21, although the review could be brought forward to reflect developments and events. Fitch's rating review will consider the timeliness of an agreement to raise the debt limit, the projected time before which the new limit would become binding and the risk of a similar episode re-occurring in the near term.

The rating review will also focus on the outlook for the US public finances, including projections and forward-looking judgments on fiscal measures, the budget deficit and the government debt/GDP ratio. Prior to placing the 'AAA' on RWN it had been on Negative Outlook since November 2011 because of adverse trends in the public finances.