Economy

Moody’s downgrades Pakistan’s rating amid depleting forex reserves

In another setback to Pakistan, global ratings agency Moody’s today downgraded the country’s rating to Caa3 from Caa1 as it struggles with depleting foreign exchange reserves and mounting debt levels.

It said that Pakistan’s “increasingly fragile liquidity” position has increased the default risks to a level consistent with a Caa3 rating.

“The decision to downgrade the ratings is driven by Moody’s assessment that Pakistan’s increasingly fragile liquidity and external position significantly raises default risks to a level consistent with a Caa3 rating,” it said.

However, Moody’s changed the outlook to stable from negative.

Pakistan is currently in talks with the International Monetary Fund to resume the $6.5 billion loan package.

The ratings agency said that the IMF loan programme may help to cover Pakistan’s immediate needs.

“We have to accept unwillingly the strict conditions for the IMF deal,” Pakistan Prime Minister Shehbaz Sharif earlier said as Islamabad accepted the stringent riders laid by the multilateral agency.

The IMF revived the $7 billion loan package late last year but the programme ran into uncertainty after the country’s Finance Minister Ishaq Dar reversed the policies reducing fuel prices.

Staring at a default, the cash starved country battling its worst economic crisis.

According to reports, Islamabad has asked the Accountant General of Pakistan Revenues (AGPR) to halt salaries and pensions of various federal ministries and the departments under them until further notice is issued.

Also read: As Pakistan awaits IMF loan, inflation soars amid fears of default

IN Bureau

Recent Posts

“Political witch hunt”: Trump on continuation of trial against Israeli PM Netanyahu

US President Donald Trump on Saturday (US local time) called the continuation of the trial…

1 hour ago

Serbia: Protests erupt in Belgrade over calls for snap elections

Protestors in Serbia took to the streets of Belgrade and demanded an early election, as…

2 hours ago

“Deserves contempt”: MEA rejects Pakistan Army’s claim over attack in Waziristan

The Ministry of External Affairs (MEA) on Sunday strongly rejected the Pakistani Army's claims, where…

2 hours ago

Indian Army, Russian Land Forces bolster defence ties at IRIGC meet in St. Petersburg

Indian Army strengthens ties with Russian Land Forces at the 4th Indo-Russian Inter-Governmental Commission (IRIGC)…

2 hours ago

Indian contingent demonstrates tactical proficiency, joint synergy in France in SHAKTI-VIII exercise

The Indo-French Joint Military Exercise SHAKTI-VIII continues to strengthen operational interoperability and mutual cooperation between…

20 hours ago

PM Modi attends centenary celebrations of Acharya Shri 108 Vidyanand Ji Maharaj

Prime Minister Narendra Modi attended the centenary celebrations of the revered Jain spiritual leader Acharya…

22 hours ago