InvestorQ : Is it possible that Indian sovereign ratings could be lowered to Junk Status and what could that mean?
Aditi Sharma made post

Is it possible that Indian sovereign ratings could be lowered to Junk Status and what could that mean?

Answer
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diksha shah answered.
4 months ago


As of now, India is still in Investment Grade although it is the lowest point of Investment grade. However, Swiss investment bank UBS has warned of the possibility that S&P and Fitch may also cut the sovereign rating outlook for India to negative from stable. Moody’s had already done that earlier this week. The rating by the 3 top rating agencies stands at Baa3 or equivalent, which is the lowest investment grade. Anything below would mean getting into junk status. That could have two implications for India. Firstly, it would result in outflows of FPIs from Indian debt to the tune of $10 billion. Secondly, if India is shifted to Junk status, then the rupee could weaken substantially, although the RBI has enough forex reserves of close to $500 billion to support the rupee.