Ratings bodies warn on Mexico
EMERGING markets took a hit yesterday, as ratings agency Moody’s put out a warning on India, and Fitch cut its rating on Mexico.
Moody’s warned that the deteriorating credit conditions in the banking system in India had created fears that problem loans will increase, while banks’ profitability will weaken. India’s banking system, which is largely state-owned, has not been hit too severely by the credit crunch, and has won wide applause for its conservative approach. But Moody’s has maintained a negative outlook on the Indian banking system.