Moody's, however, retained China's Aa3 rating, noting the country's sizeable reserves gave it time to implement reforms and gradually address economic imbalances
The ratings agency felt that China's fiscal strength will continue to decline and forex reserves will also see a fall
According to the report, the Budget is credit negative for PSU banks due to the insufficient allocation of capital.
Moody's estimates 11 public sector banks' external capital requirements at Rs 1.45 lakh for the four financial years, ending March 31, 2019
The ratings agency pointed out that the implementation of seventh pay commission will boost consumption growth
Limited exposure to external headwinds, like China slowdown and lower commodity prices will help growth