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Moody's upgrades 4 Indian financial institutions' ratings

Moody's upgrades 4 Indian financial institutions' ratings

"Moody's upgrading India's Ratings is a reflection of India growth story and sound economic principles for a #NewIndia".

Credit ratings indicate the general creditworthiness of an entity (such as a bank, corporate or sovereign) and the likelihood that it will meet its financial obligations in a timely manner.

The agency raised India's rating to Baa2 from Baa3 and changed its outlook on the rating to stable from positive. "It is a belated recognition of the positive steps taken in the past few years".

Taking on detractors who have criticised reforms, including demonetisation and GST, Jaitley, said, "I am sure that many who had doubts would now seriously introspect on their own positions". In its biggest single-day surge in six weeks, the rupee gained 31 paise to end at a one-week high of 65.01 against the dollar. "A clear recognition of economic & institutional reforms; well paced shift towards formalisation of the economy; improvement in business climate;positive growth outlook". The country's sovereign rating has now moved a notch above Baa3, the lowest investment grade and just a level above junk rating, to Baa2. The second quarter's numbers would be out by the end of this month.

Moody's noted that, the fading of disruption assisted by recent government measures to support SMEs and exporters with GST compliance, real GDP growth will rise to 7.5 per cent next fiscal, with similarly robust levels of growth from FY2019 onward.

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Former Economic Affairs Secretary Shaktikanta Das said in a tweet: "Moodys upgrade India's credit rating after 13 years".

The Congress was quick to dismiss India's improved rating.

The outlook on new rating is stable - this means that factors that can lead to a downgrade of India's rating and the ones that can upgrade its score are evenly balanced.

Senior Bharatiya Janata Party leader Yashwant Sinha on Friday took a dig at the Narendra Modi government said that there should be a midnight ceremony in Parliament to celebrate Moody's upgrade of India's rating.