Economy

BRICS rating agency plan gathering pace

Surabhi New Delhi | Updated on January 11, 2018 Published on May 04, 2017

Talks on with corporates, experts for finding a suitable agency

Plans of the five-nation BRICS bloc to set up its own credit rating agency seem to be gathering pace, with discussions being held with the corporate sector and experts on finding a suitable agency.

“The main issue is that the agency that conducts sovereign ratings can not be a government organisation. It has to be independent, with an international or at least regional reputation and credentials to be taken seriously at the global forum,” said a person familiar with the development.

Discussions are now on with industry representatives as well as financial and economic experts on whether an existing agency should be roped in or a new institution set up to conduct sovereign ratings.

“As of now, it is more of an academic discussion. A finalised proposal could be announced maybe in the second half of the year,” said the person.

Concerned by the methodologies of global rating agencies that they often perceive as “unfair”, BRICS nations — Brazil, Russia, India, China and South Africa — had in 2015 first proposed an independent BRICS Ratings Agency.

This was then, in October 2016, made a part of their joint declaration and would be “based on market-oriented principles, in order to further strengthen the global governance architecture”.

Ratings peeve

BRICS countries have frequently complained of being assigned low credit ratings by the three top global agencies despite showing better fundamentals than many peers and even some European economies.

While China enjoys a higher rating, member countries such as South Africa and India have junk and lowest investment grade ratings respectively.

India through the Finance Ministry has been calling for a ratings upgrade by international ratings agencies based on its high growth and improved fiscal situation.

In fact, unhappy with the low ratings, the Economic Survey 2016 had also questioned why India was not given a rating upgrade by global agencies while giving an upgrade to China.

Earlier, this week, Fitch also left India’s ratings unchanged at BBB- with a stable outlook, which is the lowest investment grade.

Published on May 04, 2017

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
null
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.