India's Currency, Stocks Fall After Moody's Cut Outlook into Negative

India's currency and stock market fell at the end of Friday's trading, after growing uncertainty over the future of the country's economy.

India's financial markets were negatively affected by Moody's decision to cut India's outlook from "stable" to "negative".

The rating agency cited increased risks to the country's economic growth as government and policy effectiveness in addressing those weaknesses declined.

India's economy  grew 5 percent in the second quarter, the slowest pace in nearly six years.

The Indian economy is undergoing a significant slowdown, hitting a six years low in Q2. A crisis in the finance sector has stumbled lending, affecting investments.

Also, recent policy reforms have left small-and-medium businesses (SMEs) struggling to create along with the government enough employment opportunities.

“While government measures to support the economy should help to reduce the depth and duration of India’s growth slowdown, prolonged financial stress among rural households, weak job creation, and, more recently, a credit crunch among non-bank financial institutions (NBFIs), have increased the probability of a more entrenched slowdown,” Moody’s analysts said.

Shashi Tharoor, India's former minister of state for foreign affairs, highlighted the economic problems facing India's economy at the moment, blaming Narendra Modi's government for the situation.

At the end of today's trading, the Indian currency fell against its US dollar by more than 0.4 percent, bringing the dollar to 71.2863 rupees.

The Nifty 50 index, measuring  the country's benchmark,  ended the day 0.9 percent lower to close at 11,908.1 points.