13.6.13

Fitch rates India Stable

Fitch Ratings revised the outlook on India’s sovereign rating from “negative” to “stable”, citing the government’s efforts to contain fiscal deficit and some progress in addressing impediments to investment and growth. However, it maintained its BBB (minus) rating.
The move comes days after Fitch was reportedly asked why it had shared the rating data with a US panel.
Fitch revised its India rating outlook days after the finance ministry, according to sources, asked why shared the information with the US Securities and Exchange Commission (SEC). The agency denied the charge, but the revision in the outlook is bound to raise questions about the timing of the move.
The outlook revision also comes against the backdrop of fresh economic challenges faced by India with the rupee weakening sharply against the US dollar and concerns over growth and the pace of economic reforms. The global rating agency said Indian authorities were successful in containing the upward pressure on the Union Budget deficit in the face of a weaker than-expected economy.
India has been battling a ratings downgrade after deterioration of its public finances and slowdown in growth, but since last September, the government has taken steps to trim the fiscal deficit. Standard & Poor’s is now the only agency which still has a negative outlook on India’s rating. Like Fitch, Moody’s also has a stable outlook.

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