CareEdge became the first Indian credit rating agency to enter the global scale ratings space, including sovereign ratings.
Key Highlight
- Assigned an AAA rating to Germany, Netherlands, Singapore, and Sweden.
- India was assigned BBB+, citing its resilient post-pandemic recovery and its focus on infrastructure investment.
- India's general government debt-to-GDP ratio is projected to reduce from 80% (currently) to 78 % by FY30.
About Sovereign Credit Rating (SCR)
- Credit ratings are forward-looking opinions on the relative ability of an entity to meet its financial commitments, i.e., credit risk or relative creditworthiness of a borrower.
- SEBI regulates domestic credit rating agencies (CRISIL, ICRA, CARE etc.).
- SCR represent an assessment of a country's or sovereign entity's ability to meet debt obligations, including both capability and willingness to repay debt.
- SCR facilitates borrowing from global capital markets at low cost, boosts investors’ confidence, attracts foreign investment, etc.
- Currently, SCRs are dominated by 3 US-based rating agencies – S&P, Moody’s, and Fitch.
Issues prevailing in SCR rating by US-based rating agenciesSeveral nations, including India, have questioned grading by global credit rating agencies, citing reasons like:
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