Moody’s downgrades Pakistan’s sovereign credit rating
KARACHI: The credit rating agency Moody’s has downgraded Pakistan’s sovereign rating, citing a worsening current account balance, dwindling foreign exchange reserves, and looming payments to the International Monetary Fund.
The New York-based Moody’s – one of the three largest credit rating agencies in the world – downgraded Pakistan’s foreign and local currency bond ratings from B3 to Caa1.
In a note issued on Friday, Moody’s listed four major reasons for the downgrade: “a deterioration in Pakistan’s balance of payments over the past year, the looming large repayments to the IMF, the dwindling level of official foreign-exchange reserves, and the institutional weakness stemming from political instability and constrained government finances.” The ratings agency also issued a negative outlook for the country, meaning that a rating upgrade is unlikely in the medium term.
It’s going bleaker by the day. This government was never capable of running a successful economic show, but it has proved far incompetent than any our our guesses.