Global ratings agency Moody’s on Tuesday upgraded India’s short-term foreign currency rating from speculative to investment grade — a move that will encourage foreign institutional investors (FIIs) to invest in government securities and also enable domestic firms to raise loans from overseas banks at cheaper rates.
“There has been another upgrade by Moody’s with the short-term country ceiling on foreign currency bank deposit increasing from NP (not prime) to Prime (P-3), suggesting acceptable ability to repay short-term obligations,” the finance ministry said.
Last month, Moody’s upgraded the rating on long-term government bonds denominated in domestic currency from Ba1 to Baa3 — from speculative to investment grade.
The long-term country ceiling on the foreign currency bank deposits was also upgraded from Ba1 to Baa3 from speculative to investment grade, the finance ministry statement said.
India’s sovereign debt is rated by six international sovereign credit rating agencies namely Standard and Poor’s, Moody’s , Dominion Bond Rating Service, Fitch Ratings, Japanese Credit Rating Agency and Rating and Investment Information.
These agencies consult finance ministry and the RBI before making their credit assessment.