Much to account for

The upgrade of rupee-denominated long-term Indian government debt by the rating agency Moody’s on Wednesday should not be cause for excitement. Moody’s itself recognised that it was just a correction in the bias inherent in its rating of foreign currency-denominated Indian government debt as more secure than rupee-denominated debt. Yet this should be seen only as the beginning of a much-needed correction. It is not just that Moody’s is the only agency so far to have made this call. It is also that, even at this revised level – which makes rupee-denominated debt “investment-grade” – India’s economy may continue to be rated at a level that does not accurately reflect its fundamentals.

Read Full Story>>