Moody's rating upgrade certifies reforms are in right direction: Sebi chief

Moody's upgrade, its first since January 2004, moves India's rating to the second-lowest level of investment grade.

"It is an upgrade which has happened after 13 years. We welcome it and believe that it is a belated recognition of all the positive steps taken in India in the last few years which have contributed to the strengthening of the Indian economy", he told reporters here.

NEW DELHI:The rupee strengthened 64 paise to 64.68 against dollar in early trade on Friday after global rating agency Moody's Investors Service upgraded India's local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook to stable from positive.

Along with the rating upgrade, the Moody's also changed the outlook for India's rating to stable from positive.

Jaitley said that it is encouraging that there is an worldwide recognition and this recognition firms our determination to follow the track that we have embarked upon.

"Rating upgrade by Moody's Investors Service on India's sovereign bonds would make a huge a difference to India Inc's capacity to tap the global financial markets at very competitive rates", said Assocham Secretary General D.S. Rawat.

More news: Kushner Sends Records Related to Russia Probe to Special Counsel Mueller

Sovereign credit rating indicates the level of risk faced by investors while investing in a country.

"It's a recognition and endorsement of the reforms taken by the government particularly in the last three-four years..."

Stating that reforms will foster sustainable growth, Moody's said government is mid-way through a wide-ranging programme of economic and institutional reforms.

On mention of India's fiscal prudence in the Moody's report, Jaitley said "India continues on the path of fiscal prudence which has brought stability to the economy".

Rejoicing at the news, the Rupee opened with its biggest gain in four years at 64.72/USD.

However, Moody argued that measures such as the GST, demonetisation, and others would need time to settle in, and the impact would be witnessed in due course of time. "Longer term, India's growth potential is significantly higher than most other Baa-rated sovereigns", it said.

  • Adam Floyd