Economy

India's outlook cut to 'negative' as Moody's warns of growth risks

India's outlook cut to 'negative' as Moody's warns of growth risks”

The USD/INR pair witnessed a 30-pips bullish opening gap on Friday and went to refresh three-week highs at 71.30 at the open after the Indian Rupee was heavily hit by Moody's Investor Service downgrade of India's outlook to "Negative" from "Stable".

Moody's said India's outlook partly reflects government and policy ineffectiveness in addressing economic weakness, which led to an increase in debt burden from already high levels.

However, the Baa2 rating balances the country's credit strengths including its large and diverse economy and stable domestic financing base for government debt, against its principal challenges including high government debt, weak social and physical infrastructure and a fragile financial sector.

This cut in ratings comes nearly after two years when it had upgraded India's sovereign ratings.

The agency, however, has retained India's credit rating at Baa2. "Government of India has also proactively taken policy decisions in response to the global slowdown", the ministry said.

India's finance ministry reacted to the statement by saying that the country "continues to be among the fastest growing major economies in the world".

The government added that the fundamentals of the economy remained robust, with inflation under check and bond yields low and that India continued to offer strong prospects of growth in the near and medium term. "The central bank off late has been on a buying spree in spot but it would not want the rupee to move out of whack such that the volatility leads to concerns over capital inflows", forex advisory firm IFA Global said in a note.

The downgrade to the outlook puts additional pressure on authorities to kickstart the economy, although they have limited room to move.

With her maiden Budget for 2019-20 seemingly failing to address the widening problems in the economy, she took to announcing measures aimed at reversing the slowdown within a month of Parliament approving her Budget.

The benchmark S&P BSE Sensex stock index dropped 0.2 per cent at 9:25am in Mumbai, while the rupee fell 0.4 per cent to 71.25 per USA dollar at open after the outlook cut. "There's a reasonable probability that that could happen, and this is a negative outlook so it gives them some time to play this out".

The ministry said: "As India's potential growth rate remains unchanged, assessment by International Monetary Fund and other multilateral organizations continue to underline a positive outlook on India".



Like this

loading...
loading...

Latest


08 November 2019
Rare new HIV strain identified
In order to determine a new subtype, three cases must be discovered independently. No other new subtypes have been characterized since 2000".

08 November 2019
USA has agreed to roll back trade tariffs, PRC says
But Chinese trade expert Huo Jianguo said the move was a vindication of Beijing's long-held position on the punitive tariffs. The Chinese Commerce Ministry said the two sides would decide how much tariffs would be rolled back in first phase.

08 November 2019
Manchester United win 'template' for future performances - Solskjaer
It is certainly not guaranteed; Brighton actually head into the fixture two points and two places above their hosts in the table. Before Partizan's visit to Old Trafford on Thursday night, United had gone 1-0 up on 11 occasions this season.

08 November 2019
37 killed in Burkina Fasos deadliest attack in five years
The company added that "there is no reason to believe that our employees or operations are targeted". At least 60 other people were wounded in the ambush, according to regional governor Col.

08 November 2019
RuPaul's Drag Race UK will return for a second series in 2020
Also cop seasons 1-11 of the United States version as well as RuPaul's Drag Race All Stars and RuPaul's Drag Stars Untucked . The current season's finale airs at 8 p.m. on Thursday, November 21, exclusively on BBC iPlayer in the United Kingdom .

08 November 2019
Italy making climate change courses mandatory for schools
One cold spring day in Milan, Salvini, then the interior minister, appeared to trivialize climate change . However, Fioramonti said his ministry would stand strong against the opposition.

08 November 2019
Carrie Fisher's brother reveals shocking original 'Star Wars' ending for Leia
The Force Awakens was her first time on set, and on her first day of rehearsal, Fisher followed her around like a stage mom. They grabbed every frame and analyzed it. and then reverse-engineered it and [got] it into the story the right way.

08 November 2019
Woman fired over access to leaked tape of ABC's Amy Robach
Whoopi: I simply said that when you're saying your father has taken more heat as a president, that is not so. Epstein died behind bars at the Manhattan Correctional Center in August at the age of 66.

08 November 2019
People just received messages originally sent on Valentine's Day
So at two: 30am, my cellphone resolved to deliver a textual content to my ex-girlfriend....from nine months back. In other cases, the hiccup appears to have created awkwardness, with people receiving texts from estranged exes.

08 November 2019
Michael Bloomberg expected to file for USA presidential primary
Elizabeth Warren (D-Mass.) during the Democratic Presidential Debate at Otterbein University in Westerville, Ohio on October 15, 2019.