RBI Governor Meets Top Bosses Of Ratings Agencies Amid Their Warnings

RBI Governor Shaktikanta Das met top bosses of ratings agencies

Reserve Bank of India (RBI) governor Shaktikanta Das on Thursday met the top executives of various credit ratings agencies via video conferencing. The meeting comes after ratings agencies Moody’s and Standard and Poor’s (S&P) issued fresh sovereign ratings for India. While Moody’s downgraded India’s rating, S&P chose to maintain its stance. Both the agencies however, have flagged coronavirus-related concerns in their forecast. 

In a press note released by the RBI after the meeting, the central bank said that Mr Das discussed issues related to rating agencies’ assessment of macroeconomic situation and outlook on various sectors, overall financial health rated by the agencies, major factors affecting credit ratings and ways to strengthen rating processes.

The meeting was also attended by deputy governors and other senior officers of RBI, the note stated.


On 1 June, Moody’s Investors Service downgraded India’s sovereign rating, citing challenges in implementation of policies to mitigate risks of a sustained period of low growth and deteriorating fiscal position. Moody’s downgraded Government of India’s foreign-currency and local-currency long-term issuer rating, and local-currency senior unsecured rating to “Baa3” from “Baa2”, and short-term local-currency rating to “P-3” from “P-2”

Then on June 10, S&P retained India’s sovereign rating at the “BBB-” – the lowest investment-grade level – with a stable outlook. It said that the economic hit from the coronavirus pandemic will worsen the country’s weak fiscal settings, however the stable outlook reflects the expectation that the country’s’ economy will recover following the containment of the COVID-19 pandemic.

Experts suggest that there are a number of concerns that may emerge if the ratings agencies decide to further downgrade India’s status, including steepening of the bond yield curve and weakening of the rupee.

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