WASHINGTON, Oct. 15 (Xinhua)-- The U.S. Treasury said Tuesday that Fitch's warning to the triple-A credit rating of the United States is a reminder to lawmakers of the urgency of a debt ceiling deal.
Fitch Ratings warned earlier Tuesday it would downgrade the U.S. sovereign credit rating from AAA, citing the political brinkmanship over raising the federal government's borrowing limit.
"The announcement reflects the urgency with which Congress should act to remove the threat of default hanging over the economy," a Treasury spokesperson said in response.
In a statement released Tuesday afternoon, Fitch said although it continues to believe the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default.
"Although the (U.S.) Treasury would still have limited capacity to make payments after 17 October it would be exposed to volatile revenue and expenditure flows," Fitch said.
It added that failure by the U.S. government to honor interest or principal payments on the due date of U.S. Treasury securities would lead Fitch to downgrade the country's sovereign issuer default rating to "restricted default".
The U.S. Treasury has made it clear that extraordinary measures will be exhausted by Oct. 17, leaving cash reserves of just 30 billion U.S. dollars.