 "Moody’s downgrade of India’s sovereign debt had been on cards for months")
The decision of Moody’s to downgrade India’s sovereign debt, both in rupee and forex — from Baa2 to Baa3, the lowest investment grade status — had been on the cards for months, despite hectic behind-the-scenes lobbying by officials to avoid a downgrade. In that sense, it is hardly a shock. Moody's has also downgraded India's local-currency senior unsecured rating from Baa2 to Baa3, and its short-term local currency rating from P-2 to P-3.
The outlook on India's rating would improve to stable if policy actions raise confidence that growth will rise to sustainably higher rates than Moody's projects. However, rising
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