S&P: Asia-Pacific sovereign credit mixed

Standard & Poor's said the outlook for Asia-Pacific sovereign credit ratings for the remainder of 2005 remains mixed, according to a report titled "Asia-Pacific Sovereign Report Card."

Hesitant domestic demand, with reduced import demand from China, could test consumer and business confidence across Asia. India and China, however, continue to assume growth leadership, the agency said.

S&P noted the recent change in the Chinese exchange rate regime is also boosting the region with a new bout of speculative activities and liquidity.

"On the monetary front, life is getting more interesting," said S&P credit analyst Ping Chew.

"Inflationary pressures, driven by both strong demand and rising oil prices, remain strong in several economies, posing a challenge to monetary authorities."

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