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Moody's ups India rating

19 November 2017

Prior to this rating action, HDFC Bank's BCA and ratings were constrained by India's previous sovereign rating of Baa3 given the bank's significant exposure to the government in common with other Indian banks.

The agency also raised India's local currency senior unsecured debt rating to Baa2 from Baa3 and its short-term local currency rating to P-2 from P-3.

Earlier on Friday, the US-based credit rating agency Moody's had upgraded India's sovereign credit rating by a notch to "Baa2" with a stable outlook citing improved growth prospects driven by economic and institutional reforms.

Addressing a press conference after Moody's, one of the major ratings agencies upgraded India's sovereign ratings to Baa2 from Baa3, Jaitley said the recognition will further the determination of the government to do better.

"We welcome this upgrade, we believe that it is a belated recognition of all the positive steps which have been taken in India in the last few years, which has contributed to strengthening of Indian economy", Jaitley said. All steps taken in the last few years had a roadmap.

Defending demonetisation, he said it has helped in taking the economy towards formalisation and digitalisation, and the success was being universally acknowledged. "The structural reforms that have placed India on the path of a high trajectory growth", Jaitley said.

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"Introduction of Aadhar, recapitalization of public sector banks, smooth transition of GST and demonetization have all been landmark reforms", he said.

The upgrade came after 13 years.

Hitting out at opposition for criticising government's economic policies, Jaitley said that those who had doubts about India's reform process should seriously introspect on their position.

All Indian markets including stocks, bonds and rupee rallied on the rating upgrade. The rating agency also assigned a stable outlook to SBI's DIFC branch.

"Moody's upgrade of India's rating is a reaffirmation of the various reform measures undertaken by the government over the last three to four years and we welcome this move", said FICCI President Pankaj R. Patel.

Moody's ups India rating