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With reference to the sovereign credit ratings, consider the following statements:
1. The Economic Survey 2020-21 has called for sovereign credit ratings methodology to be made more transparent, less subjective and better attuned to reflect an economy’s fundamentals.
2. According Economic Survey 2020-21 Sovereign Credit Ratings can be pro-cyclical and affect equity and debt FPI flows of developing countries, causing damage and worsening crisis.
Which of the statements given above is/are correct?
  • a)
    1 only        
  • b)
    2 only        
  • c)
    Both 1 and 2        
  • d)
    Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
With reference to the sovereign credit ratings, consider the following...
The Economic Survey 2020-21 has called for sovereign credit ratings methodology to be made more transparent, less subjective and better attuned to reflect an economy’s fundamentals.
  • Never in the history of sovereign credit ratings, has the fifth largest economy in the world been rated at the lowest rung of the investment grade (BBB-/Baa3) except in the case of China and India.
  • Reflecting on the economic size and thereby ability to repay debt, at all other times, the fifth largest economy has been predominantly rated AAA.
  • The Survey points out that the Sovereign Credit Ratings can be pro-cyclical and affect equity and debt FPI flows of developing countries, causing damage and worsening crisis. Hence, it has called for addressing the bias and subjectivity inherent in sovereign credit ratings methodology
  • India has already raised the issue of pro-cyclicality of credit ratings in G20.
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With reference to the sovereign credit ratings, consider the following statements:1. The Economic Survey 2020-21 has called for sovereign credit ratings methodology to be made more transparent, less subjective and better attuned to reflect an economy’s fundamentals.2. According Economic Survey 2020-21 Sovereign Credit Ratings can be pro-cyclical and affect equity and debt FPI flows of developing countries, causing damage and worsening crisis.Which of the statements given above is/are correct?a)1 only b)2 only c)Both 1 and 2 d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?
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With reference to the sovereign credit ratings, consider the following statements:1. The Economic Survey 2020-21 has called for sovereign credit ratings methodology to be made more transparent, less subjective and better attuned to reflect an economy’s fundamentals.2. According Economic Survey 2020-21 Sovereign Credit Ratings can be pro-cyclical and affect equity and debt FPI flows of developing countries, causing damage and worsening crisis.Which of the statements given above is/are correct?a)1 only b)2 only c)Both 1 and 2 d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for Current Affairs 2024 is part of Current Affairs preparation. The Question and answers have been prepared according to the Current Affairs exam syllabus. Information about With reference to the sovereign credit ratings, consider the following statements:1. The Economic Survey 2020-21 has called for sovereign credit ratings methodology to be made more transparent, less subjective and better attuned to reflect an economy’s fundamentals.2. According Economic Survey 2020-21 Sovereign Credit Ratings can be pro-cyclical and affect equity and debt FPI flows of developing countries, causing damage and worsening crisis.Which of the statements given above is/are correct?a)1 only b)2 only c)Both 1 and 2 d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Current Affairs 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to the sovereign credit ratings, consider the following statements:1. The Economic Survey 2020-21 has called for sovereign credit ratings methodology to be made more transparent, less subjective and better attuned to reflect an economy’s fundamentals.2. According Economic Survey 2020-21 Sovereign Credit Ratings can be pro-cyclical and affect equity and debt FPI flows of developing countries, causing damage and worsening crisis.Which of the statements given above is/are correct?a)1 only b)2 only c)Both 1 and 2 d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.
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