Moody Downgrades India to Lowest Investment Grade
Global ratings agency Moody’s Investors Service downgraded India’s sovereign rating to the lowest investment grade. The lowering of the rating — from Baa2 to Baa3 — brings it on a par with S&P and Fitch which rate India at BBB (minus), the lowest investment grade. Firstly, the pandemic has am
Published -
Jun 2, 2020 5:59 AM
Global ratings agency Moody’s Investors Service downgraded India’s sovereign rating to the lowest investment grade. The lowering of the rating — from Baa2 to Baa3 — brings it on a par with S&P and Fitch which rate India at BBB (minus), the lowest investment grade. Firstly, the pandemic has amplified the vulnerabilities in India's credit profile that were present and building prior to the shock, and secondly, the country’s policy making institutions would be challenged in enacting risk mitigating policies, further deteriorating in the government fiscal position and stress in the financial sector. Slow reform momentum and constrained policy effectiveness have contributed to a prolonged period of slow growth, compared to India's potential, that started before the pandemic and that Moody's expects will continue well beyond it.
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