Fitch cuts India rating

International rating agency Fitch has revised India’s local currency outlook to negative from stable because of the government’s worsening fiscal condition and rising inflation. It cited fears that the fiscal deficit could rise to 6.55 of the GDP. The negative outlook suggests a likely increase in the sovereign default rate, which may affect the flow of funds into the country leading to a rise in interest rates. The new revised local currency rating will be BBB with negative outlook as against the earlier rating of BBB- with stable outlook.

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