Moody's Investor Services has upgraded rating on rupee-denominated long-term government bonds from Bal to Baa3 (ie, from speculative to investment grade). The long-term country ceiling on the foreign currency bank deposits has also been upgraded from Bal to Baa3 (from speculative to investment grade).
Moody's has also upgraded rupee-denominated short-term government bonds from NP (not prime) to P-3 (from speculative to investment grade).
This is the first time that Moody's has upgraded short-term rating for GoI bonds since it was newly assigned in 1998, a government release said today.
In addition to these three upgrades, Moody's have upgraded the short-term country ceiling on foreign currency bank deposits from NP (not prime) to P-3 (prime: acceptable ability to repay short-term obligations).
In its Investors Services Global Credit research, released on 20 December 2011, Moody's has underlined some of the government's efforts at fiscal consolidation by appreciating that the government ''eliminated petrol subsidies and changed the way fertiliser subsidies are calculated, which may yield some budgetary savings.
There have also been initiatives on the revenue front involving simplification (and hence hoped-for improvements in compliance) of indirect and direct taxes."