Moodys upgrades Indias foreign currency debt rating to Ba1
04 February 2003
Mumbai: International rating agency Moodys has upgraded Indias foreign currency debt rating.
Moody's says it has upgraded the countrys ceiling for foreign currency debt to Ba1 from Ba2, top of the speculative grade. It has also raised the sovereign issuer rating to Ba1 from Ba2.
The agency has also upgraded the countrys ceiling for foreign currency bank deposits to Ba1 from Ba3, unifying it with the governments Ba 2 domestic currency debt rating, which was not on review and was affirmed with a negative outlook.
Moodys says the decision concluded a review for upgrade that began in November 2003. The outlook on the Ba1 foreign currency debt ceiling is stable. But Moodys concern about the poor state of the countrys public finance continues to warrant a negative outlook on the governments Ba2 domestic currency rating.
The upgraded Ba2 bank deposit ceiling was assigned a negative outlook because of the close linkage between the risk of government domestic debt restructuring and the potential for restrictions on large foreign currency withdrawals from the banking system.
the reasons for the upgrade, the agency says the countrys
foreign reserves have expanded especially rapidly over
the past year as increased merchandise exports, dynamic
sales of information technology services and large workers
remittance helped move the current account into surplus,
while capital inflows too mounted.