Moody's rating downgrade unlikely to rattle markets, say experts

'It was expected that Moody's would align back India's rating with Fitch and S&P'

The sovereign rating downgrade by Moody’s from Baa2 to Baa3 was expected, and it is unlikely to unsettle the markets in a major way on Tuesday, said experts.

But there can be some kneejerk reaction in the spot markets, which the Reserve Bank of India (RBI) can take care of. “It was expected that Moody’s would align back India’s rating with the other two rating agencies (Fitch and S&P). India continues to remain investment grade, and this downgrade should not materially impact the markets,” said Harihar Krishnamurthy, head of treasury at First Rand Bank. 
 

Besides, the central bank has been