The Indian currency has fallen nearly five per cent in the last two years and 20 per cent in the last five years, becoming one of the weakest performing currencies in South and South-East Asia, Moody’s Ratings said on Thursday. There has been a continuous decline in the value of rupee against the US dollar. Recently the rupee had fallen to a low of Rs 86.70 per dollar. There is a lot of concern in the economic world regarding this.
Moody’s has assessed 23 companies in India to understand the effects of the falling rupee. Based on this, Moody’s found that only six of these companies are being affected by the strength of the dollar. However, Moody’s said in its report that these companies also have factors to reduce the impact. These companies included in Moody’s assessment include Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL), Indian Oil Corporation (IOC), UltraTech Cement, Bharti Airtel and ANI Technologies Private Limited.
“The rupee has depreciated by only five percent in the last two years, but it has fallen by more than 20 percent since January 2020,” Moody’s said in its report on companies in South and Southeast Asia emerging markets. . “Thus it has become one of the weakest performing currencies in South and South-East Asia.” This assessment of the rating agency is contrary to the perception prevalent in many areas that amid the strength of the dollar, the performance of the Indian currency has been much better than other currencies.
India’s fiscal position will continue to weigh on its creditworthiness in 2025, but it could benefit from a shift in trade and investment flows from China, Moody’s Ratings said in its Asia-Pacific 2025 Outlook on Wednesday.
Moody’s said, ‘India’s fiscal conditions will continue to constrain its credit capacity even in 2025. “We expect fiscal consolidation to be gradual and creditworthiness to remain well above the average of 57 per cent for Baa rated peers.”
It said trade barriers imposed by the US would weaken economic output across the region. “Despite revenue growth in recent years, we estimate credit strength to remain significantly weaker than ‘rated’ peers,” it said. Political and social unrest pose significant economic and fiscal risks, the report says.