Global rating agency Moody’s on Wednesday upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa1 from Caa2.
The international rating agency — one of the top three global rating firms — said its decision to upgrade was due to “Pakistan’s improving macroeconomic conditions under the International Monetary Fund (IMF) Extended Fund Facility (EFF) program”.
The global rating agency has also raised the rating for the senior unsecured MTN program to (P)Caa1 from (P)Caa2.
“At the same time, we have revised the outlook for the Government of Pakistan to stable from positive,” the agency said.
In its statement, the agency noted that Pakistan’s foreign exchange reserves are expected to continue improving, though the country will remain reliant on timely financial support from official partners.
It further observed that the sovereign’s fiscal position is gradually strengthening from previously weak levels, aided by an expanding tax base. Debt affordability has also improved; however, it remains among the weakest of all rated sovereigns.
