Moody’s Investor Service changes India credit rating to positive

Policy actions will enhance India’s economic and financial strength, says the rating agency

GN Bureau | April 9, 2015


#Moody’s   #credit rating   #positive   #economy   #Narendra Modi   #Raghuram Rajan  

In the backdrop of record foreign exchange reserve in India’s kitty, there is one more good news that may strengthen the hands of prime minister Narendra Modi when he visits Europe this month.  India’s credit rating outlook has been raised to positive by Moody’s Investors Service on Thursday. The country’s Baa3 rating was affirmed and the outlook was revised from stable.

It said there was an increasing probability that actions by policy makers will enhance the country's economic strength and, in turn, the sovereign's financial strength over coming years. Moody's said it expected structural advantages, supported by relatively benign global commodity prices and liquidity conditions, will keep India's growth higher than that of its peers over the rating horizon.

The ratings agency had improved the country's sovereign credit rating outlook from negative to stable in September last year indicating the possibility of a rating upgrade.  And Thursday’s positive outlook signals global optimism in the efforts of Modi and Reserve Bank of India governor Raghuram Rajan to improve Asia’s No. 3 economy.

Policy makers are putting in place the right measures to address inflation and increase investment, Moody’s said.

“Recent measures to address inflation, keep external balances in check, simplify the regulatory regime for investors, increase foreign direct investment, and facilitate infrastructure development will reduce some of India’s sovereign credit constraints,” Moody’s said. “The ability of policy makers to strengthen India’s sovereign credit profile to a level consistent with a higher rating will become apparent over the next 12-18 months.”

“The Baa3 rating incorporates the risk that higher levels of growth and infrastructure development will be accompanied by higher leverage,” it said. “Sovereign credit improvements over the next 12-18 months will depend on the extent to which growth, policies and buffers can contain the risks associated with rising leverage.”

Meanwhile, forex reserves increased by more than $1 billion in the week ended March 27 to $341.4 billion, according to data released by RBI. The reserves are closing the financial year at a record high, having breached the previous record of $320 billion in February this year.

In 2014-15, foreign institutional investors (FIIs) invested $44.83 billion in equity and debt. Of this, $17.89 billion was invested in equity and $26.93 billion in debt. FII investment rose more than four-and-a-half times compared with $9.76 billion in 2013-14.

 

Comments

 

Other News

Will Delhi see the highest ever turnout in the upcoming civic polls?

Historically, voter turnout for local elections has lagged behind state assembly elections and general elections.    For example, a recent report by Janaagraha shows that Surat recorded 40 percent voter turnout in local polls, 30 percent less than state elections

Women sensitized about their rights

 A group of women were sensitized about their rights at a workshop held in the national capital on Saturday. They were informed about the anti-harassment laws and legal provisions to safeguard women inside and outside their workplace.   The workshop – organ

AAP’s uncertain future, irony of being Advani, and an author seeks freedom of speech

The Narendra Modi- Arvind Kejriwal antagonism has always been about two different kinds of populism. While it may not play out in a municipal election, the fact remains that a Kejriwal chastened by Goa and Punjab faces a mid-term test in the municipal elections. For a politician harbouring intentions of

Petro-products home delivery isn’t a new idea

A plan to home-deliver petroleum products may look like an out-of-the-box idea, but it is not exactly a new one. Petroleum minister Dharmendra Pradhan tweeted: “Options being explored where petro products may be door delivered to consumers on pre booking. This would help consumers avoi

Freedom of speech is an index of maturity of a society: Author Githa Hariharan

How do you view the state of contemporary Indian literature? Our cultural spaces are in a bad state – and this affects the writing, publishing and reading of literature. Over the last few years, we have seen far too many cases of the self-appointed thought police intim

A recurrent script plays out again in Odisha

On February 28, 2017, Khainu (Hadu) Bagarti, a farmer from Bargarh district of Odisha, died at the Burla government hospital. Burdened by crop failure and debt, he had consumed pesticide. This was spoken of as the state’s first farmer suicide of the year, as if it were a distinction. But the



Video

फिर एकजुट होगा एआईएडीएमके

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter