New Delhi, May 28 - Global agency Moody's today said the sliding rupee will not impact India's sovereign ratings, but may hurt private sector companies with large overseas debts.

"Significant Indian rupee depreciation is insignificant for sovereign credit... The direct effect of depreciation on the government's own debt repayment capacity is limited," Moody's Investors Service said in its report.

The report further pointed out that the current rupee volatility will be "less damaging than in 1991, when low reserves and a widening current account deficit prompted India's last balance of payment crisis".

The Rupee had dipped to a record low of Rs 56.40 against dollar last week on withdrawal of funds by foreign institutional investors and a widening current account deficit (CAD). The CAD went up to 4 per cent of GDP in December 2011, from 2.6 per cent in March 2011.

The rupee fall, however, was arrested following steps taken by the RBI in the forex market. It was trading at Rs 55.05 against dollar in early trade. PTI