Fitch downgrades rupee, India downgrades Fitch

On Tuesday the rating agency Fitch downgraded India’s local currency grade to negative from stable, pushing the rupee down 0.7%, as it fears that the government’s deficit may increase from 2.8% of GDP in 2008 to 4.5% the following year.

Fitch’s decision sounds reasonable as the Indian rupee has been very volatile in recent times and the country’s inflation rate continues to move north.