In spite of slow economic progress, Global agency Moody has improved the short term foreign currency rating of India from speculative to investment grade. With this improvement, the domestic companies will be able to raise funds from the overseas markets at lower rates.
Moody has made another upgrade with the short term county ceiling on foreign currency bank deposit. It has been upgraded from not prime to prime (P3). It suggests that the Indian companies have got the ability to repay short term obligations.
With this development, the FII’s are expected to increase their investment in the Indian market. The rating of government bonds has also being increased from Ba1 to Baa3. This is an improvement to increase the rating from speculative to investment grade.
The improvement in India’s ratings came as the country has proved themselves to be much resistant to global shocks and it has been proved by the performance of the economy during the past three years. Moody also feels that the current slowdown of the economy will start reversing from 2012-13 and inflation is also expected to cool down from the present level of 9%.
Government of India has approached the rating agency for giving a rating on ‘short-term country ceiling on foreign currency bank deposit’. This improvement in rating will help to improve India’s rating at the international market and give a better access to funds.