Washington (Web Desk): United States Principal Deputy Assistant Secretary for South and Central Asian Affairs Alice Wells has welcomed the improvement in Pakistan’s outlook by credit rating agency Moody's.
“With bold economic reforms, Pakistan can boost growth, attract private capital, and expand exports,” Wells, in a tweet issued on behalf of her by the US State Department said.
Pleased to see that @MoodysInvSvc has revised Pakistan’s credit outlook to stable thanks to @FinMinistryPak’s reform efforts and IMF program. With bold economic reforms, Pakistan can boost growth, attract private capital, and expand exports. AGW— State_SCA (@State_SCA) December 3, 2019
Earlier, Moody’s Investors Service – one of the three global credit rating agencies – has changed Pakistan’s credit rating outlook to stable from negative, reaffirming the country's rating of B3.
Moody’s also affirmed the government of Pakistan’s local and foreign currency long-term issuer and senior unsecured debt ratings at B3.
Moody's had downgraded Pakistan's ratings outlook to negative last year in June, citing heightened external vulnerability risk due to depleting foreign exchange reserves.
"The change in outlook to stable is driven by Moody's expectations that the balance of payments dynamics will continue to improve, supported by policy adjustments and currency flexibility.
Such developments reduce external vulnerability risks, although foreign exchange reserve buffers remain low and will take time to rebuild," said Moody's on Monday.
"Moreover, while fiscal strength has weakened with higher debt levels largely as a result of currency depreciation, ongoing fiscal reforms, including through the country's International Monetary Fund (IMF) programme, will mitigate risks related to debt sustainability and government liquidity," it added.