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Implications of Moody’s Revised Ratings on Outlook for India

December 16, 2009

International rating Agency, Moody’s has revised the rating for India’s Economic Outlook.

  • The local currency sovereign bond rating at Ba2, Moody’s has revised the outlook from stable to positive.
  • Foreign Currency Bank deposits ratings have been raised from Ba2 to Ba1

Implications of the Revision – The ratings still remain below those of S&P/Fitch. The
changes are a reflection of (a) India’s strong growth prospects (b) its robust external position and (c) its demonstrated ability to withstand the global financial crisis.

Here is the complete Guide to Moody’s and S&P / Fitch Rating
Investment Grade:
Moody’s: Aaa, Aa1, Aa2, Aa3, A1, A2, A3, Baa1, Baa2, Baa3
S&P/Fitch: AAA, AA+, AA, A+, A, BBB+, BBB, BBB

Non-Investment Grade:
Moody’s: Ba1, Ba2, Ba3, B1, B2, B3
S&P/Fitch: BB+, BB, BB-, B+, B, B

As Indian citizens, it hardly matters to us about these ratings since we have stronger faith in the Discplined and Ethical Central Bank, the RBI which has saved India from crisis.

One can always argue that these ratings decide the FII flow, but the Indian Insurance / Pension scheme have become a driving force in the market, can you believe it ?

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