RTTNews - Thursday, the Moody's Investors Service said the ratings outlook for the Indian government's Baa3 foreign currency rating and Ba2 local currency rating remained stable. But, the nation faces various challenges in the areas of macroeconomic management and a backlog of structural reforms.

According to Aninda Mitra, Vice President and Senior Analyst of Moody's, India's ratings are based on Moody's assessment of the country's moderate levels of economic and institutional strength that in turn are supported by a large, rapidly growing, and well-diversified economic structure.

The rating agency said in its new report that the fiscal policy predictability and credibility deteriorated in absolutely, while its macro policy effectiveness is modest. He noted that low financial strength is due to its poor debt affordability and fiscal space. However, a comfortable external position and favorable debt structure limits imminent risks. Mitra added that India has an enormous capacity to absorb political shocks.

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