The robust economic growth coupled with low oil prices will make India’s automobile asset based securities (ABS) or vehicle loans stable, said Moody’s Investors Service on Monday.

According to Moody’s India’s securitisation markets will perform in a stable manner with good credit quality across most asset classes.

“In India, robust growth and low oil prices will underpin stable auto ABS performance, despite the economic disruption from the country’s demonetisation,” said Yian Ning Loh, a Moody’s Senior Vice President.

Moody’s conclusions are contained in its just-released 2017 outlook for the sector, titled “Structured Finance — India, Korea and Singapore: 2017 Outlook — Performance Stable, Credit Quality Good Across Most Asset Classes”.

Moody’s expects the performance of Indian commercial vehicle (CV) loans backing auto ABS transactions to remain stable.

Delinquency rates will increase somewhat in the very short term owing to the Indian government’s decision to withdraw Rs 500 and Rs 1,000 notes.

However, delinquencies should return to their current levels over the course of 2017, owing to robust economic growth and low oil prices.

Moody’s also expects new Indian auto ABS issued in 2017 to have good credit characteristics.

Residential mortgage performance should also remain strong in 2017, with low delinquencies reflecting low interest rates, steady house prices and stable prepayment rates.