The US-based ratings agency, Fitch Ratings, in its latest report, said that “we further lowered India's GDP forecast for the fiscal year ending March 2022 (FY22) to 8.7% from 10.0% in June as a result of the severe second virus wave.”

Key takeaways

But high-frequency indicators pointed to a strong rebound in the second quarter, as business activity returned to pre-pandemic levels.”

“Raised the FY23 forecast to 10%, from 8.5%, in view of the sharp recovery.”

“Kept the country's rating unchanged at BBB-minus with a 'negative' outlook.“

"The impact of the second wave of the pandemic was to delay, rather than derail, India's economic recovery.”

Market reaction

USD/INR keeps its corrective decline from six-month tops of 75.54 intact, as it currently trades at 75.22, down 0.21% on the day. The rupee stands resilient to the GDP forecast downgrade by Fitch Ratings.