<div>Moody's on Monday, 19 August, reiterated its stable outlook on India's Baa3 sovereign rating, Bloomberg cited analyst Atsi Sheth.<br /><br />India's rating is supported by low levels of overseas government debt and adequate reserves for balance of payments needs in the near term, Sheth said in an email to Bloomberg. "The rating is also supported by domestic savings rate," it added.<br /><br />India's sovereign rating is at the lowest investment grade level. Moody's said that it will continue to asses the country's foreign exchange reserves adequacy. "India has adequate reserves for near-term BoP payments," it said.<br /><br />According to Moody's, flows are unlikely to accelerate unless growth outlook improves. "Fiscal policy is the weakest aspect of Indian economy," it said.<br /><br />Earlier in the day, in an interview with ET Now, Sheth said, "India has had certain amount of capital controls before and will likely continue to have capital controls into the future. Indian authorities have been very clear that capital account liberalisation is something they will address with caution."<br /><br />"In our view, India has always had capital controls. The measures announced recently were indeed adjustments in the amounts of controls. So depending on what your own view is, you can interpret it as new capital controls or an adjustment of capital controls. But the fact is that there were capital controls before, there will be capital controls now and the amount of control is what is being adjusted now," she added.<br /><br />"In my view, what is affecting the attractiveness of the country as an investment destination are two factors. One is the growth outlook that we are seeing coming in and the second factor is the policy environment," Sheth said.<br /><br />"We saw over the last year a flurry of announcements which have been seen positively by some because they open the doors to investment in certain sectors and they liberalise regulation in certain other sectors. But the net result of all those announcements has still not reflected in the growth. There is still uncertainty as to what next will come from the government that will really propel an improvement in the investment outlook."<br /><br />"Until there is some clarity that the government is going to take measures that will actually lead to private investors making direct investments, the attractiveness of India as an investment destination will remain subdued," she added.<br /><br />Earlier today, The rupee fell past 63 per dollar to a record low on sustained dollar demand from state-run and foreign banks.<br /><br />The rupee closed at 63.13 to a dollar, down 2.4 per cent on the day. The currency closed trading on Friday at 61.65/66 (not 61.55/56).<br /><br /> </div>
