Moody’s Ratings (Moody’s) on Wednesday, August 13, upgraded Pakistan’s credit to ’Caa1’ from ’Caa2’, indicating an improvement in the country’s financial situation. Meanwhile, the analysts at Moody’s changed the outlook for the Government of Pakistan to stable from positive.The Government of Pakistan’s local and foreign currency issuer and senior unsecured debt ratings have been changed to Caa1 from Caa2, according to Moody’s. The global ratings firm also upgraded the rating for the senior unsecured MTN programme to (P)Caa1 from (P)Caa2.
Under Moody’s long-term obligation rating, a ‘Caa’ rating suggests a poor standing and very high credit risk for the fixed income obligation. However, the numeric identifier indicates the higher end of its rating category.
In May, Moody’s, against the backdrop of India-Pakistan border tensions, said that a persistent increase in tensions could also impair Pakistan’s access to external financing and pressure its foreign-exchange reserves, which remain well below what is required to meet its external debt payment needs for the next few years.Also read: Moody’s downgrades US credit rating — A look back at its earlier downgradesSeparately, the ratings agency said that India is well-positioned to deal with the negative effects of US tariffs and global trade disruptions due to its large domestic economy and low dependence on exports, Moody’s Ratings said in its ‘Emerging Markets – India’ report on Wednesday, May 21.
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