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How rating upgrade impacted rupee

18 November, 2017, 00:25 | Author: Samuel Sharp
  • Equity markets open in green as Moody’s elevates India's rating to Baa2

Standard and Poor's, which still assigns the lowest investment grade to India with a stable outlook, said India needed to address its weak fiscal position, indicating upgrades would take time.

Former Economic Affairs Secretary Shaktikanta Das said in a tweet: "Moodys upgrade India's credit rating after 13 years".

"This change is a positive for the rupee and India in the medium term as it lends credibility to the ongoing reform agenda which should support inflows, ameliorating some concerns over current account-deficit financing", Nomura said in a report. "We welcome (the upgrade) and believe that it is a belated recognition of all the positive steps taken in India in the last few years which have contributed to the strengthening of the Indian economy", Jaitley said. "It is a major global recognition of major economic and institutional reforms undertaken by the Government of India", he said while addressing a press conference here.

Moody's Investors Service on Friday upped the long-term ratings of four Indian financial institutions including SBI and HDFC Bank by a notch to Baa2 following the upgrade of the country's sovereign rating to the same level.


Meanwhile the Sensex closed 236 points higher after the Moody's upgrade, while the NSE index rose almost 70 points.

"Moody's upgrading India's Ratings is a reflection of India growth story and sound economic principles for a #NewIndia". While GST and demonetisation have undermined growth over the near term, real GDP growth will rise to 7.5 per cent in 2018- 19 as disruption fades, it said. S&P and Fitch Ratings have India a rung above junk. It also claimed that India's growth potential superseded that of many other sovereign nations. The Narendra Modi government has been pitching for an upgrade for quite some time now citing various reforms initiatives.

The outlook on new rating is stable - this means that factors that can lead to a downgrade of India's rating and the ones that can upgrade its score are evenly balanced.

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