Fiscal slippage could have negative bearing on India's rating: Fitch

Posted By: Religare
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Fitch has cautioned that fiscal slippage could have negative bearing on India's sovereign rating, which is at the lowest investment grade in view of weakening CAD and persistent inflationary pressure, reported PTI.

"In India and Indonesia, both BBB- (lowest investment credit rating) with stable outlook, their relatively weak starting positions with high inflation and recent rises in current account deficits (CAD) suggest that their credit profiles have limited tolerance for policy slippage that saw their current account deficits and-or inflation rates stay high or rise further," it said.

Countries experiencing the greatest pressure on their currencies and reserve levels are those where weakening current-account positions and persistent inflationary pressure have raised doubts over the credibility of policy management - India and Indonesia in particular, it said.

In a report titled 'Emerging Asia: Slowing Growth Amid Market Pressures', Fitch sees limited scope for policy slippage for either sovereign at the current rating levels of 'BBB-' with stable outlook.

Dion Global Solutions Ltd.

Read more about: fitch, soverrign rating, cad, inflation
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