Re slide has implications on India’s credit profile: Moody’s

New Delhi: Rupee depreciation is a reflection of macro-economic situation and will have implications for India's credit profile, said global rating agency Moody's.
"… It (Rupee slide) is a reflection of macro-economic challenges, which do affect the country's credit profile," Moody's Investors Service Analyst (Sovereign Risk Group) Atsi Sheth told PTI.
Weakened Rupee touched a life-time low of 59.93 to a dollar last week. However, it will not impact India's sovereign debt repayment capacity, she said.
"Given the very low level of foreign currency debt owed by the Indian government, rupee depreciation does not significantly affect sovereign debt repayment capacity," Sheth said.
She attributed the rupee fall to India's Current Account Deficit (CAD) and lower capital flows due to slower domestic growth as well as global factors, including the recent announcement of the US Federal Reserve.
Last week the US dollar strengthened against major currencies, including Indian Rupee, on comments by Federal Reserve Chairman Ben Bernanke that the US Fed may start scaling back its monetary stimulus programme later this year.
Moody's currently has a "stable" outlook on India's ratings. In January, Moody's had reaffirmed sovereign credit rating of India at 'Baa3', which indicates investment grade.
The CAD, which is the difference between the inflow and outflow of foreign currency, is estimated to be at 5 per cent in 2012-13 fiscal.
Moody's expects Indian economy to grow by 6 per cent in 2013-14. In 2012-13, the economic growth has slowed to a decade low of 5 per cent.