India faces a potential downgrade in its credit rating to “junk” status unless its government takes firm action to end a mounting economic crisis, one of the world’s leading rating agencies said yesterday.
Fitch’s warning that the BBB rating — one notch above junk status — could be revised downwards came as the rupee plunged to a fresh record low. “Rapid private sector credit growth, widening fiscal deficits or sustained higher inflation could lead to a broader and more sustained loss of confidence among investors,” the group said.
“This could potentially undermine economic and financial stability and ultimately lead to negative rating action.”
The warning, which Fitch said also applied to Indonesia, came as the rupee extended recent falls to strike a record low against