Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
25 April, 2015 21:29 IST
Rising CAD, external debt may impact India's credit risk profile: Moody's
Source: IRIS | 18 Feb, 2013, 10.04AM
Comments  |  Post Comment

Moody's has warned that rising current account deficit and external debt may impact India's credit risk profile because they increase the country's vulnerability to international financial volatility.

The new report from Moody's Investors Service, which has assigned Baa3 with a stable outlook to India, said that India's current account deficit at record high of 5.4% of the gross domestic product in the second quarter ended September and 4.6% in the first half of the current fiscal is partly a result of its domestic policies like fuel subsidies, rise in gold imports despite increase in international gold prices, and loose fiscal policy.

The current-account deficit, which averaged less than 1% of GDP in the first half of the last decade, was 4.2% of GDP last fiscal year.

''In addition to monthly trade data and quarterly current account trends, we will also monitor the specific domestic developments to determine the likely direction of India's external position over the medium-term,'' said the Moody's report titled 'Credit Implications of India's Current Account Deterioration'.

It observed that any near-term improvement in India's current account and external debt metrics depends on domestic changes because global growth in 2013 may be only modestly better than 2012 and commodity prices are unlikely to fall significantly from current levels.

While the government has announced a slew of measures such as allowing global players to enter aviation and retail and liberalising norms for external borrowing, Moody's said it will monitor whether policy changes shift the composition of current account financing in favour of FDI, or whether external debt inflows accelerate faster than investment flows.

Comments Post comment 
 Post Comment
Name Email
Comment
Security Code type    into this box
Related Articles
Infosys expects FY16 revenue to grow 10-12% - 24-Apr-2015 15:33
Infosys to acquire Kallidus for USD 120 mn - 24-Apr-2015 15:00
Infosys Q4 misses estimates; profit falls 4.7% sequentially - 24-Apr-2015 14:53
GPT Infraprojects bags order worth Rs 1.29 bn - 24-Apr-2015 13:07
IL&FS Engineering wins order worth Rs 3.26 bn from BMRCL - 24-Apr-2015 12:57
Rel Capital Asset Management in strategic alliance with Samsung Asset Management - 24-Apr-2015 10:53
Suven Life secures five product patents for NCEs - 24-Apr-2015 10:27
Advent, Temasek to buy CG's consumer electricals unit - 24-Apr-2015 10:01
Cairn India swings to Q4 loss on lower oil prices, exceptional item - 23-Apr-2015 19:09
IDBI Bank signs MoU with Bajaj Allianz General Insurance Company - 23-Apr-2015 18:54
IDBI Bank signs MoU with Bajaj Allianz General Insurance - 23-Apr-2015 18:21
more...
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer