The Hindu : Fitch retains India's forex, local debt ratings

Online edition of India's National Newspaper
Wednesday, Feb 12, 2003

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Fitch retains India's forex, local debt ratings

NEW DELHI FEB. 11. Fitch Ratings today retained India's long-term foreign and local currency ratings at the speculative grade of BB and BB+ respectively, close on the heels of Moody's upgrading the country's foreign currency rating by a notch.

Like Moody's Investor Services, Fitch also cited improvement in the country's external account due to strong forex reserves. However, Fitch had a word of caution on the deterioration in local public finances.

The global rating agency put short-term foreign currency rating at B, indicating highly speculative category.

"India's international liquidity position has strengthened, with international reserves (excluding gold) rising by $18 billion between March 2002 and January 2003,'' it said in a statement. Fitch, however, pointed out that oil imports and remittances from West Asia would be a weak area in case of a U.S.-Iraq war. It said: "...growing prospect of a conflict with Iraq could expose India's dependence on oil imports and overseas workers' remittances from the Middle East.''

Expressing concern over the country's public finances, Fitch said there was a need to reform its banking system and implement fiscal consolidation.

Moody's had upgraded on February 3 last, India's foreign currency rating to Ba1 from Ba2, which is still below investment grade.

— UNI

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