US Senate reaches fiscal deal to end US shutdown

More than a fortnight after the government shutdown in the US, Republican and Democrat leaders of the Senate Wednesday struck a cross-party deal that will end the partial shutdown and raise the debt limit, BBC reported.

The deal involves a bill that will extend the federal borrowing limit until Feb 7, and fund the government until Jan 15, 2014.

The bill must also pass the House, where a small group of Republicans is expected to join the Democrats in sending the bill forward to President Barack Obama.

The development comes in the nick of time, just a day before the deadline to raise the $16.7 trillion (10.5 trillion pounds) limit ends.

Both chambers of the US Congress were working on bills ahead of the Oct 17 deadline when the Treasury says the US will run out of cash to pay its bills amid a warning from the Fitch credit rating agency that it may downgrade US government's AAA credit rating.

Fitch placed the US credit rating on negative watch Tuesday, a step that would precede an actual downgrade saying "the political brinkmanship and reduced financing flexibility could increase the risk of a US default".