USD/INR Price News: Indian rupee pressured as Moody’s cuts India’s rating to a notch above junk
In its latest credit assessment report on the Indian economy released on Monday, Moody’s Investors Service announced a downward revision to the country’s sovereign credit rating to a notch just above junk.
This comes as the global rating agency projects a prolonged period of slowdown in India’s economic growth and ballooning debt, in the face of the coronavirus crisis.
Key quotes
“The cut to Baa3 from Baa2 was not driven directly by the impact of the coronavirus but that the pandemic had amplified vulnerabilities in India’s credit profile that were present and building prior to the shock.
Maintained a negative outlook for the new sovereign rating.
Worsening government finances as the coronavirus continue to hurt the economy.”
USD/INR to see more gains
With the credit rating downgrade, the Indian rupee trades on the back foot against the US dollar so far this Tuesday’s Asian trading, around 75.50.
USD/INR is seen resuming the previous rebound and could regain the 76 barrier, as India’s bearish fundamentals overshadow the optimism driven by the economic re-opening.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
