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India’s First Moody’s Upgrade in 14 Years Bets on Reforms

  • Rupee and government bonds rally, stock markets surge
  • Moody’s says reforms reduced risk of sharp increase in debt
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Why Moody's Raised India's Credit Rating

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Moody’s Investors Service raised India’s sovereign rating for the first time since 2004, overlooking a haze of short-term economic uncertainties to bet on the nation’s prospects from a raft of policy changes by Prime Minister Narendra Modi.

Rupee, bonds and stocks rallied after the ratings firm upgraded India to Baa2 from Baa3 and said reforms being pushed through by Modi’s government will help stabilize rising levels of debt. That’s a one-level shift from the lowest investment-grade ranking and puts India in line with the Philippines and Italy.