Categories: Business

Not surprised by rating downgrade says SBI report

Photo: GOOGLE

SBI on Rating downgrade

new Delhi. The downgrade of India's ratings by rating agency Moody's is not a surprise move. A report by SBI said that this should not be surprising as global rating agencies have lowered the rating outlook of around 21 emerging economies since the outbreak of the Kovid-19 crisis. Moody's has reduced India's sovereign rating to BAA 3 with a negative outlook. The rating agency has said that it has taken this step in view of slow growth rate, rising debt and pressure in the financial system. Apart from reducing the rating of India, Moody's has also taken steps on the ratings of 11 Indian banks.

SBI's research report 'EcoRap' says, "The rating cut is not contrary to expectation." The data shows that the market has not been affected by the ratings decrease. Both BSE Sensex and NSE Nifty have recorded gains. The rupee has also strengthened against the dollar. "The report said that India is not the only country whose ratings have been reduced. So far the ratings of 21 emerging and developing countries of the world have either been reduced or the scenario has been reduced. This is not surprising as emerging markets are more likely to fall in ratings than developed economies under pressure. The report says that the rating action is not about the ability of the Indian government to meet its debt commitments. The report said that sovereign foreign debt is about 20 percent of the country's total debt. The current level of foreign exchange reserves is sufficient to meet debt commitments.

This post was published on June 2, 2020 10:40 pm

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