Moody`s upgrades India`s credit rating after 14 years |
Moody`s said the Indian government is midway through a wide-ranging programme of economic and institutional reforms such as the recently-introduced Goods and Services Tax (GST) that promotes productivity by removing barriers to inter-state trade. Moody`s Investors Services upgraded India`s sovereign ratings to Baa2 from its lowest investment grade (Baa3), giving credit to the Narendra Modi government for its “wide-ranging program of economic and institutional reforms”. It has now changed the outlook for India`s rating to stable from positive. Sovereign credit ratings are a barometer of a country`s monetary, fiscal and regulatory policy climate. A favourable rating helps governments and companies raise capital in the international financial market. Also, institutional investors rely on ratings in making investment decisions. The rating upgrade comes after a gap of 14 years. The decision to upgrade the ratings is underpinned by Moody`s expectation that continued progress on economic and institutional reforms will, over time, enhance India`s high growth potential and its large and stable financing base for government debt.
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