Moody's ratings 'extremely encouraging', endorses Centre's reforms, says Jaitley

Moody's ratings 'extremely encouraging', endorses Centre's reforms, says Jaitley

Moody's ratings 'extremely encouraging', endorses Centre's reforms, says Jaitley

However, the other two global rating agencies - Fitch and Standard & Poor's - maintain a BBB- rating with a stable outlook for India.

The 10-year bond yield ended at 7.05 per cent, after hitting a low of 6.94 per cent earlier in the day after Moody's upgraded India's sovereign rating.

"It is a major worldwide recognition of major economic and institutional reforms undertaken by the Government of India", he said while addressing a press conference here.

As such, an upgrade of the sovereign rating also drove an upgrade of the bank's BCA and ratings.

The steps taken by the government in the last few years have contributed to the strengthening of the Indian economy, and the upgradation is an endorsement of the ongoing reform process, he said.

The Narendra Modi government has just received a pat on the back from a heavyweight-credit rating agency Moody'.

The US-based Moody's on Friday upgraded India's sovereign credit rating by a notch to "Baa2" with a stable outlook citing improved growth prospects driven by economic and institutional reforms.

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The Sebi chief also said the rating upgrade to Baa2 would further boost investments including foreign inflows.

He also refuted there was any link between the upgrade and the elections in Gujarat and Himachal Pradesh, and said stable reforms will not be possible if only election-oriented decisions are taken.

However, at a Morgan Stanley event in Singapore on Thursday, he had said, "No pause, but challenges arising from structural reforms (which) could change the (fiscal) glide path".

Taking on opposition, Jaitley said those who had doubts about the government's reforms must introspect.

The global ratings agency, however, cautioned that high debt burden remains a constraint on the country's credit profile. "The rating agency too has now confirmed it formally, which is welcome".

Radhika Rao, an economist at DBS, said implementation of reforms, a subdued rural sector and weak investment have slowed economic growth while rising oil prices have raised the risks.

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