India has built up buffers against cyclical difficulties and has ample foreign exchange reserves to withstand pressure on credit worthiness, S&P Global Ratings said. Speaking at the India Credit Spotlight 2022 webinar, S&P Sovereign & International Public Finance Ratings Director Andrew Wood said the country has a strong external balance sheet and limited external debt, making debt servicing not so expensive. He said the rating agency does not expect the near-term pressures to have a serious impact on India’s credit worthiness.
Bank Maha Pack includes Live Batches, Test Series, Video Lectures & eBooks
The rupee has depreciated about 7 per cent against the US currency this year but has performed better than its emerging market peers. Wood said India has “ample buffer” in its foreign exchange reserves and the forex kitty is expected to recover to USD 600 billion by the end of this year. Forex reserve stood at USD 570.74 billion as of August 12. The US-based agency has a ‘BBB-‘ rating on India with a stable outlook. “We are expecting a strong level of GDP growth of 7.3 per cent this fiscal,” he said, adding the rupee exchange rate movement against the US dollar has been moderate.
S&P Global Ratings Economist Asia Pacific Vishrut Rana said economic activity and consumer confidence have been improving. After a 7.3 per cent GDP growth this fiscal, the economic growth is expected to moderate to 6.5-6.7 per cent over the next fiscal year. Indian economy expanded 8.7 per cent in the last fiscal (2021-22).
A credit rating is a way of assessing the creditworthiness of entities such as individuals, groups, businesses, non-profit organizations, governments, and even countries. Special credit rating agencies analyze their financial risk to see whether or not these borrowers will be able to pay back loans on time. The credit rating agencies compile this rating using a detailed report that takes into consideration various factors such as lending and borrowing history, ability to repay the debt, past debts, future economic potential, and more. A good credit rating improves credibility and indicates a good history of paying back loans on time in the past. It helps banks and investors decide about approving loan applications and the rate of interest offered.
The various credit agency agencies use similar alphabetical symbols to determine credit ratings. However, these ratings are also grouped into two types of grades – ‘investment grade’ and ‘speculative grade’.
Find More News on Economy Here
Silk, often hailed as the queen of textiles, holds a significant place in India's cultural…
World Tuna Day, observed annually on May 2nd, is dedicated to raising awareness about the…
The Ministry of Corporate Affairs (MCA) has granted its approval for the appointment of Hitesh…
India, renowned for its rich tapestry of natural landscapes and cultural heritage, is home to…
Paul Auster, the renowned American novelist and filmmaker, has passed away at the age of…
Renowned playback singer Uma Ramanan, who predominantly sang in Tamil, passed away at the age…