{"id":12347,"date":"2017-11-18T14:38:48","date_gmt":"2017-11-18T09:08:48","guid":{"rendered":"http:\/\/blog.forumias.com\/?p=12347"},"modified":"2017-11-18T14:38:48","modified_gmt":"2017-11-18T09:08:48","slug":"moodys-upgrades-indias-ratings-to-baa2","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/moodys-upgrades-indias-ratings-to-baa2\/","title":{"rendered":"Moody&#8217;s upgrades India\u2019s ratings to Baa2"},"content":{"rendered":"<p><strong>Context\u00a0<\/strong><\/p>\n<ul>\n<li>Moody&#8217;s has today upgraded the Government of India&#8217;s local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive.<\/li>\n<li>Moody&#8217;s has also upgraded India&#8217;s local currency senior unsecured rating to Baa2 from Baa3 and its short-term local currency rating to P-2 from P-3<\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>What happened?<\/strong><\/span><\/p>\n<ul>\n<li>Moody&#8217;s has also raised India&#8217;s long-term foreign-currency bond ceiling to Baa1 from Baa2, and the long-term foreign-currency bank deposit ceiling to Baa2 from Baa3.<\/li>\n<li>The short-term foreign-currency bond ceiling remains unchanged at P-2, and the short-term foreign-currency bank deposit ceiling has been raised to P-2 from P-3.<\/li>\n<li>The long-term local currency deposit and bond ceilings remain unchanged at A1.<\/li>\n<li>Moody&#8217;s separately raised the ratings of top Indian lender State Bank of India, HDFC Bank as well as state-run energy firms, NTPC, NHPC, GAIL India Limited and the National Highways Authority of India, potentially lowering their borrowing costs.<\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>What is Moody\u2019s?<\/strong><\/span><\/p>\n<ul>\n<li>Moody&#8217;s is an essential component of the global capital markets, providing credit ratings, research, tools and analysis that contribute to transparent and integrated financial markets.<\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>What is credit rating?<\/strong><\/span><\/p>\n<ul>\n<li>An assessment of the\u00a0creditworthinessof a borrower in general terms or with respect to a particular debt or financial obligation.<\/li>\n<li>A\u00a0creditrating can be assigned to any entity that seeks to borrow money \u2013 an individual, corporation, state or provincial authority, or sovereign government.<\/li>\n<li>Credit assessment and evaluation for companies and governments is generally done by a credit rating agency such as\u00a0Standard &amp; Poor\u2019s or\u00a0Moody\u2019s<\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>What could move the ratings up?<\/strong><\/span><\/p>\n<ul>\n<li>The rating could face upward pressure if there were to be a material strengthening in fiscal metrics, combined with a strong and durable recovery of the investment cycle, probably supported by significant economic and institutional reforms.<\/li>\n<li>Greater expectation of a sizeable and sustained reduction in the general government debt burden, through increased government revenues combined with a reduction in expenditures, would put positive pressure on the rating.<\/li>\n<li>Implementation of key pending reforms, including land and labor reforms, could put additional upward pressure on the rating.<\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>What could move the ratings down?<\/strong><\/span><\/p>\n<ul>\n<li>A material deterioration in fiscal metrics and the outlook for general government fiscal consolidation would put negative pressure on the rating.<\/li>\n<li>The rating could also face downward pressure if the health of the banking system deteriorated significantly or external vulnerability increased sharply.<\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>How was India\u2019s sovereign rating in the past?<\/strong><\/span><\/p>\n<ul>\n<li>Moody&#8217;s Investors Service raised India&#8217;s sovereign rating for the first time since 2004, overlooking a haze of short-term economic uncertainties to bet on the nation&#8217;s prospects from a raft of policy changes by Prime Minister Narendra Modi.<\/li>\n<li>That&#8217;s a one-level shift from the lowest investment-grade ranking and puts India in line with the Philippines and Italy.<\/li>\n<li>The World Bank has acknowledged it&#8217;s getting easier to do business in India, with Asia&#8217;s third-largest economy jumping 30 places to rank 100th in the latest ranking released last month.<\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>What are the factors influencing the ratings?<\/strong><\/span><\/p>\n<ul>\n<li>Moody&#8217;s cited the goods and services tax, which it said will promote productivity by removing barriers to interstate trade, improvements to the monetary policy framework, measures to clean up non-performing loans, and efforts to bring more areas into the formal economy.<\/li>\n<li>Efforts to cut red tape and the imposition of a new consumption tax &#8212; have met with mixed success.<\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>What is the significance of India\u2019s performance?<\/strong><\/span><\/p>\n<ul>\n<li>Moody&#8217;s believes that those implemented to date will advance the government&#8217;s objective of improving the business climate, enhancing productivity, stimulating foreign and domestic investment, and ultimately fostering strong and sustainable growth.<\/li>\n<li>The reform program will thus complement the existing shock-absorbance capacity provided by India&#8217;s strong growth potential and improving global competitiveness<\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>What is the way ahead?<\/strong><\/span><\/p>\n<ul>\n<li>Moody&#8217;s noted that while a number of key reforms remain at the design phase, it believes those already implemented will advance the government&#8217;s objective of improving the business climate, enhancing productivity and stimulating investment.<\/li>\n<li>The recent reforms offer greater confidence that the high level of public indebtedness which is India&#8217;s principal credit weakness will remain stable, even in the event of shocks, and will ultimately decline.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Context\u00a0 Moody&#8217;s has today upgraded the Government of India&#8217;s local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive. Moody&#8217;s has also upgraded India&#8217;s local currency senior unsecured rating to Baa2 from Baa3 and its short-term local currency rating to P-2 from P-3 What&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/moodys-upgrades-indias-ratings-to-baa2\/\">Continue reading <span class=\"screen-reader-text\">Moody&#8217;s upgrades India\u2019s ratings to Baa2<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":12348,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[27],"tags":[],"class_list":["post-12347","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured-editorials","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2017\/11\/Moodys-improves-Indias-rating-644x362.jpg?fit=1005%2C511&ssl=1","views":{"total":0,"cached_at":"","cached_date":1704804529},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/12347","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=12347"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/12347\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/12348"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=12347"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=12347"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=12347"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}