Moody's ratings and Modi's expectations are finally on the same page

Moody's ratings and Modi's expectations are finally on the same page

Moody's rating actions follow the upgrade of the India's local and foreign currency issuer ratings to Baa2 from Baa3 on Thursday.

The rating upgrade comes after a gap of 13 years.

The US-based Moody's on Friday upgraded India's sovereign credit rating by a notch to "Baa2" with a stable outlook citing improved growth prospects driven by economic and institutional reforms.

Moody's report says the recent reforms offer greater confidence that the high level of public indebtedness, which is India's principal credit weakness will remain stable, even in the event of shocks, and will ultimately decline.

The agency raised India's rating to Baa2 from Baa3 and changed its outlook on the rating to stable from positive.

"We welcome this upgrade, we believe that it is a belated recognition of all the positive steps which have been taken in India in the last few years, which has contributed to strengthening of Indian economy", Jaitley said.

KENYA: Police attack Odinga's convoy, 2 opposition supporters killed
In a statement, police spokesman George Kinoti said the five were stoned to death in mob justice incidents during the march. It also marked a heavier deployment of police than in the past, as they sought to block Odinga from holding a rally.

Sovereign credit rating indicates the level of risk faced by investors while investing in a country. Congress communications in-charge Randeep Surjewala claimed the same rating agency had miscalculated USA subprime mortgages before the economic meltdown.

They have acted as a drag on growth, which hit a three year low of 5.7 percent in the first quarter of the current financial year.

Jaitley reiterated the government's commitment to structural reforms and said fiscal prudence will be maintained. Continuous OMO sales have been a key reason for the massive sell-off in the bond market since June-end, in addition to concerns over inflation and fiscal discipline.

Taking on detractors who have criticised reforms, including demonetisation and GST, Jaitley, said, "I am sure that many who had doubts would now seriously introspect on their own positions". Railway Minister Piyush Goyal said the government will stay on the path of good governance.

The move comes nearly two months after the Moody's and Standar & Poor's lowered their ratings on regional rival China citing the country's ballooning debt burden.

Related Articles