Near-term pressures not to hit India's credit worthiness

PTI

New Delhi, August 25

India has built up buffers against cyclical difficulties and has ample foreign exchange reserves to withstand pressure on credit worthiness, S&P Global Ratings said on Thursday.

Speaking at the India Credit Spotlight 2022 webinar, S&P Sovereign & International Public Finance Ratings Director Andrew Wood said the country has a strong external balance sheet and limited external debt, making debt servicing not so expensive.

AMPLE FOREIGN EXCHANGE RESERVES: S&p

The country has a strong external balance sheet and limited external debt, making debt servicing not so expensive...It has built up buffers against cyclical difficulties like those, which we are experiencing right now. —Andrew Wood, Public finance ratings director, Standard & poor’s

“The country has built up buffers against cyclical difficulties like those, which we are experiencing right now,” Wood said.

He said the rating agency does not expect the near-term pressures to have a serious impact on India’s credit worthiness.

“We are expecting a strong level of GDP growth of 7.3% this fiscal,” he said, adding the rupee exchange rate movement against the US dollar has been moderate.

The rupee has depreciated about 7% against the US currency this year but has performed better than its emerging market peers.

Wood said India has "ample buffer" in its foreign exchange reserves and the forex kitty is expected to recover to $600 billion by the end of this year. Forex reserves stood at $570.74 billion as of August 12.