Fitch Ratings: Australia is a sovereign economy with strong resilience in the Asia-Pacific region.

Jeremy Zook, Senior Director of Sovereign Ratings at Fitch, stated that overall sovereign ratings in the Asia-Pacific region remain stable, but Fitch has downgraded the outlook for five countries in the region to negative over the past year. Geopolitical uncertainties continue to rise, leading to a shrinking credit buffer for countries in the region due to multiple external shocks in recent years. It is expected that the situation in the Strait of Hormuz will return to normal navigation in July; if the current agreement is successfully reached this week, the likelihood of maintaining this navigation situation is high. The direct impact of energy price shocks on sovereign credit in various countries may be relatively limited. Australia, as a net energy exporter, is one of the sovereign entities in the Asia-Pacific region demonstrating good resilience to this shock. It is expected that the Reserve Bank of Australia will pause its rate hiking cycle at this monetary policy meeting to evaluate the policy effects of the three previous rate hikes.