The global rating agency Moody’s Investors Service on Monday downgraded India’s rating to BAA3 from Baa2, and its short-term local-currency rating to P-3 from P-2.
“Moody’s has adowngraded India’s local-currency senior unsecured rating to Baa3 from Baa2, and its short-term local-currency rating to P-3 from P-2. The outlook remains negative. The decision to downgrade India’s ratings reflects Moody’s view that the country’s policymaking institutions will be challenged in enacting and implementing policies which effectively mitigate the risks of a sustained period,” it said in a statement.
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Moody’s noted that the rating downgrade was not entirely driven by the devastating impact of the COVID-19 outbreak.
“While today’s action is taken in the context of the coronavirus pandemic, it was not driven by the impact of the pandemic. Rather, the pandemic amplifies vulnerabilities in India’s credit profile that were present and building prior to the shock, and which motivated the assignment of a negative outlook last year,” it said.