Moody’s upgrades Pakistan rating to “stable”; over improved external position

WEB DESK: Credit rating agency Moody’s has upgraded Pakistan’s rating from ‘positive’ to ‘stable’ citing improvement in the country’s external position.

The Government of Pakistan’s local and foreign currency issuer and senior unsecured debt ratings have been upgraded from Caa2 to Caa1, and the outlook from positive to stable.

The upgrade “reflects Pakistan’s improving external position, supported by its progress in reform implementation under the International Monetary Fund (IMF) Extended Fund Facility (EFF) program,” Moody’s report issued on Wednesday said.

Moody’s Ratings cited improving external buffers, fiscal consolidation, and progress on reforms under the IMF program.

The upgrade reflects growing confidence in Pakistan’s ability to manage external debt repayments, shore up foreign exchange reserves, and broaden its tax base, despite continued political uncertainty and weak governance.

The report also said that the upgrade to Caa1 from Caa2 rating also applies to the backed foreign currency senior unsecured ratings for The Pakistan Global Sukuk Programme Co Ltd.

A snapshot from the report also offers comparison, of both Fitch long-term foreign currency debt rating and S&P long-term foreign currency debt rating at B-, with stable outlook.

Also read: Tensions with India to weigh on Pakistan’s economic growth: Moody’s