Global ratings agency Standard & Poor's (S&P) on Tuesday announced its decision to maintain its negative outlook for Indian economy, citing falling value of rupee.

S&P currently has `BBB-' sovereign rating with negative outlook for India. The rating of 'BBB-' stands for the lowest investment grade; and any downgrade from this rating would push the country's rating to junk status, making it more difficult as well as costlier for businesses to furrow overseas funds.

The ratings agency underlined that the free-fall in the domestic currency is adversely impacting confidence of investors.

Kim Eng Tan, Senior Director Sovereign & International Public Finance Ratings (Asia-Pacific) at S&P, said, "We view the capital outflows and depreciating rupee as an indication of weakening investor confidence in India. We maintain a negative outlook on India's BBB- sovereign credit ratings."

Tan added that continuation of uncertainty would further deteriorate business financing conditions, leading to further decline in investment growth.

The efforts of the government of India as well as of the Reserve Bank of India (RBI) have so far remained unsuccessful in arresting the free-fall in the value of rupee. The partly-convertible currency fell to its all-time low of 64.13 against the U. S. dollar. Though it recovered during the day, but still ended trading at its record closing low of 63.13 per dollar.