Moody’s Cuts India’s Sovereign Bond Rating to ‘Baa3’ From ‘Baa2’

Moody's Investors Service cut its growth forecast for India to 5.3 percent for 2020 from 5.4 percent estimated earlier.

(Photo: Reuters)

Moody's downgraded India's sovereign rating to 'Baa3' from 'Baa2', on Monday, 1 June, maintaining its negative outlook.

According to Nasdaq, ‘Baa 3’ is the lowest rating of investment grade Moody's Long-term Corporate Obligation Rating. Obligations rated ‘Baa3’ are subject to moderate credit risk. This rating is one notch lower than ‘Baa2.’

Earlier in May, Moody's Investors Services had cautioned that India's sovereign rating may be downgraded in case its fiscal metrics weaken materially.

In a report, Moody’s had also projected zero percent growth for the Indian economy in the financial year 2020-21. In the financial year 2022, however, the GDP is projected to grow at 6.6 percent, it said.