Moody`s ups govt rupee bond ratings to positive

Last Updated: Tuesday, December 15, 2009 - 21:33

New Delhi: Investors in the rupee-denominated Government of India bonds can be more confident of their investments as Moody`s has upgraded its outlook on these instruments from stable to positive on the back of strong economic recovery.
However, the global credit rating agency has kept the
rating on these bonds unchanged at Ba2, which is a
non-investment grade.

"The change in the outlook on the local currency
government bond rating was prompted by increasing evidence
that the Indian economy has demonstrated its resilience to the
global crisis and is expected to resume a high growth path
with its underlying credit metrics relatively intact,"
Moody`s sovereign analyst for India Aninda Mitra said here on Tuesday.

Meanwhile, Moody`s raised the rating on the domestic
banks` foreign currency deposits by one notch to Ba1 from Ba2
in the non-investment category to better reflect the robust
external position of the country.

It, however, kept foreign currency denominated Government
bonds ratings at two notches higher at Baa3 than the rupee
-denominated bonds. Baa3 is an investment grade rating.

The agency said it is not changing the outlook on the
foreign currency denominated government bonds ratings.
However, there could be narrowing of the gap between the
rupee-denominated and foreign currency-denominated ratings of
the government bonds, Moody`s said.

PTI



First Published: Tuesday, December 15, 2009 - 21:33

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