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Outlook on India's 'BB' FC Rating Revised to Stable From Negative

Standard & Poor’s (S&P) Ratings Services on 16th December 2003, revised the outlook on India's 'BB' long-term foreign currency rating to stable from negative to reflect the sovereign's improving external finances. The outlook on India's 'BB+' long-term local currency rating remains negative because of the government's continuing difficulty in addressing its fiscal problems and structural reforms. Both foreign and local currency short-term ratings on the sovereign were affirmed at 'B'. India is still below the sub-investment grade. S&P has been bearish on the country, compared with other rating agencies.

In February 2003, Moody's Investors Services had upgraded India’s foreign currency debt rating from Ba2 to Ba1, one step short of the investment grade. But Moody’s action had placed its rating one notch higher than S&P’s current rating. Fitch Ratings, too, had in February 2003, affirmed India’s long-term foreign currency and local currency ratings at ‘BB’ and ‘BB+’, respectively.

Moody’s Investor Services has said that it is considering a possible upgrade on India’s rating, while Fitch Rating is said to take a view on India by January ‘04. India's foreign reserves have been steadily rising in the recent past to touch $97.52 billion as on December 6, 2003; this figure is expected to cross the $100-billion mark before the end of the calendar year.

Standard & Poor's, has revised its outlook on the foreign currency debt ratings on ICICI Bank, Industrial Development Bank of India and Bank of Baroda, to `stable' from negative, i.e., `BB/B'. This follows S&P's corresponding outlook revision on the foreign currency ratings on India (foreign currency BB/Stable/B, local currency BB +/Negative/B).

Standard & Poor’s (S&P) has also, revised the foreign currency borrowing outlook for seven Indian companies from ‘negative’ to ‘stable’ following the rating agency’s decision to upgrade the foreign currency outlook of India. The seven companies are Indian Oil Corporation, Indian Railway Finance Corp, National Hydroelectric Power Corporation, National Thermal Power Corporation, Power Finance Corporation, Reliance Industries and Tata Power.

For detailed comments of Standard & Poor's Ratings Services on Upgrade of India's Outlook...Click Here

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