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Rupee slips to 71.25 against USD as Moody’s cuts India rating outlook to negative

Rupee vs Dollar

Rupee vs Dollar   | Photo Credit: V.V. Krishnan

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At the interbank foreign exchange, the rupee opened at 71.26 then fell to 71.27 against the US dollar, showing a decline of 30 paise over its previous closing.

The rupee came under pressure in the morning trade after Moody's changed the country's rating outlook to negative. 

At time same time, Moody’s has affirmed India’s sovereign rating at Baa2. 

Rupee was trading a fresh three week low of 71.25 a dollar down 29 paisa or 0.40,%.

Yields on the 10 year benchmark government bond also hardened 4 bps while the benchmark Sensex was down 60 points.  

The decision to change the outlook to negative reflects increasing risks that economic growth will remain materially lower than in the past, partly reflecting lower government and policy effectiveness at addressing long-standing economic and institutional weaknesses than Moody's had previously estimated, leading to a gradual rise in the debt burden from already high levels, the rating agency said.

The Indian rupee on Thursday had closed at 70.97 against the US dollar.

Meanwhile, brent crude futures, the global oil benchmark, fell 0.18 % to $62.18 per barrel.

Foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in ₹ 926.60 crore on Thursday, as per provisional data.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell by 0.02 per cent to 98.12.

(With inputs from PTI)

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Printable version | Dec 14, 2019 5:45:29 AM | https://www.thehindu.com/business/markets/rupee-slips-30-paise-to-7127-against-usd-as-moodys-cuts-india-rating-outlook-to-negative/article29917265.ece

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