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Indian rupee8217;s weakness reflects domestic economic challenges,primarily a high current account deficit CAD and lower capital flows,but does not significantly impact India8217;s foreign debt repayment capacity,Moody8217;s said on Friday.
8220;Given the very low level of foreign currency debt owed by the Indian government,rupee depreciation does not significantly affect sovereign debt repayment capacity,8221; said Atsi Sheth,vice-president of the sovereign risk group at Moody8217;s Investors Service,in an e-mailed response.
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8220;However,it is a reflection of macro-economic challenges,which do affect the country8217;s credit profile.8221;
Sheth said Moody8217;s current rating of 8220;Baa38221; for India 8211; the lowest investment-grade level 8211; incorporates macro-economic imbalances and recent trends in the current account,capital flows,and the exchange rate.
The Indian currency had slumped to a record low of 59.9850 rupee to the dollar on Thursday,as the country8217;s record high current account deficit is exacerbating its vulnerability in an emerging market rout.
Moody8217;s currently has a 8220;stable8221; outlook on India8217;s ratings,in line with Fitch Ratings. Standard amp; Poor8217;s maintains a 8220;negative8221; outlook.
