For the first time in over a century, world’s largest & most liquid bond market doesn’t have an Aaa rating. Over the past decade, US govt’s fiscal metrics have deteriorated considerably.
Ratings agency kept India’s rating & outlook unchanged, citing Indian economy’s growth, banking success on the one hand versus high debt, fiscal deficit and interest payments on the other.
With agencies sticking to their methodology in these times, an emerging economy rating and outlook appear to be worse regardless of whether its government is fiscally prudent or not.
For every upgrade of rupee debt of Indian firms since 1 April there have been about 11 downgrades, leaving this quarter set to be worst on record if sustained.
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