<h1 class="ql-align-center"><strong style="color: rgb(230, 0, 0);">Sovereign Credit Rating&nbsp;</strong></h1><p class="ql-align-center"><br></p><h3><strong>Context&nbsp;</strong></h3><ul><li class="ql-indent-1">The Centre has been proactively engaging with prominent global credit rating agencies to improve India’s sovereign credit rating, Minister of State for Finance Pankaj Chaudhary told the Lok Sabha.</li><li class="ql-indent-1">He also reiterated the government’s commitment to reduce<strong> India’s ﬁs­cal deﬁcit to below 4.5% of GDP by 2025-­26,</strong> from an estimated 6.4% of GDP in 2022-­23.</li></ul><h3>About Sovereign Credit Rating&nbsp;</h3><ul><li class="ql-indent-1">A sovereign credit rating is<strong> an independent assessment of the creditworthiness of a country or sovereign entity.</strong></li><li class="ql-indent-1">Sovereign credit ratings take the overall economic conditions of a country into account, including the volume of foreign, public and private investment, capital market transparency, and foreign currency reserves.</li><li class="ql-indent-1">Sovereign ratings also assess political conditions such as overall political stability and the level of economic stability a country will maintain during times of political transition.</li><li class="ql-indent-1">Institutional investors rely on sovereign rating to qualify and quantify the general investment atmosphere of a particular country.</li></ul><h3><strong>At the request of the country, a credit rating agency will evaluate its economic and political environment to assign it a rating.</strong></h3><ul><li class="ql-indent-1"><strong>Standard &amp; Poor's gives a BBB- </strong>or higher rating to countries it considers investment grade, and grades of BB+ or lower are deemed to be speculative or "junk" grade.</li><li class="ql-indent-1"><strong>Moody’s considers a Baa3 or higher rating</strong> to be of investment grade, and a rating of<strong> Ba1 and below is speculative.</strong></li></ul><h3><strong>Note&nbsp;</strong></h3><ul><li class="ql-indent-1">Recently<strong> Moody’s Investors Service</strong> announced its decision to retain India’s sovereign credit rating a<strong>t ‘Baa3’, the lowest investment grade, and persist with its “stable” outlook on the nation.</strong></li></ul><p class="ql-align-center"><br></p><h1 class="ql-align-center"><strong>PRELIMS NOTES:</strong><a href="https://www.sunyaias.com/subscription-details/prelims-2023-sunya-notes-current-affairs" rel="noopener noreferrer" target="_blank" style="color: rgb(0, 102, 204);"><strong>CLICK HERE</strong></a></h1>