Fitch Ratings reiterated on Tuesday its “negative” outlook on India’s sovereign credit rating citing concerns about slowing economic growth persistent inflationary pressures and an uncertain fiscal outlook. The finance ministry has, however, said it was not worried about the threat of ratings downgrade by global agencies.

The comments from Fitch sovereign analyst Art Woo sent the rupee lower at 55.38 against the US dollar during the day. It, however, recoverd later to close the day 54.99, a gain of 20 paise.

Although Woo described the government’s reforms as “steps in the right direction,” he expressed concern that the government would miss its fiscal deficit target for the year.

The government meanwhile said it will restrict fiscal deficit to 5.3% of the GDP in 2012-13. “We will adhere to fiscal consolidation roadmap,”  Department of Economic Affairs secretary Arvind Mayaram said.

Reuters & PTI