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Negative outlook signals further downgrade of India is a possibility, said an official at Moody’s Investors Services after the global rating agency downgraded India’s sovereign credit rating to just a notch above junk on Monday.

Additional quotes

“Stress in financial system remains major concern for India.”

“Seeing persistent drivers contributing to downgrade which led to negative outlook being retained.”

Market reaction

USD/INR trades with modest gains and looks to extend the recovery above 75.50, as the Indian rupee remains sold-off into the bleak economic growth prospects.