Introduction:
Global rating agency Moody’s raises Pakistan’s credit rating from Caa2 to Caa1, citing a stable external fiscal position. Moody’s on Wednesday upgraded Pakistan’s credit rating to stable from positive due to improvements in Islamabad’s external fiscal position. Moody’s Ratings is a global credit rating system that assesses the creditworthiness of debtors, such as governments and corporations.
The agency uses letters such as Aaa, Baa, and Caa to denote ratings. Aaa indicates excellent condition and high quality for return. Caa indicates low payment quality and risk of loan default. There are three levels of the Caa category, including Caa1, Caa2, and Caa3, of which Caa3 specify the lowest quality and high-risk credit. Caa1 is the highest level in a category and specify low-risk credit and stability.
Pakistan is moving towards a “stable” approach:
Pakistan’s credit rating has been upgraded by one notch from Caa-2 to Caa-1, reflecting Pakistan’s stable external position. The country is on the path to improving its credit rating and country’s credit rating is at Caa1 due to the country’s weak governance and political variability.
The agency anticipates that Pakistan’s foreign exchange reserves have upgrade, but Pakistan will still remain dependent on financial assistance from partners. Moody’s has also highlighted that the country’s financial condition is also improving, due to the expansion of taxes. According to the agency, Pakistan’s local currency limit has also been improved from B3 to B2.
Statement by Prime Minister Shahbaz Sharif:
According to the Associated Press of Pakistan, Prime Minister Shahbaz Sharif has expressed happiness over the improvement in Pakistan’s credit rating. And along with this, he also appreciated the efforts of the country’s economic teams.
According to a report received from the Prime Minister’s Office, the Prime Minister has also greet Moody’s for improving Pakistan’s credit rating. He said that the improvement in credit ratings reflects sound economic policies and we are faithful to further improving our credit rating.
Conclusion:
Global rating agency Moody’s raises Pakistan’s credit rating from Caa2 to Caa1, citing a stable external fiscal position. Pakistan’s credit rating has been upgraded by one notch from Caa-2 to Caa-1, reflecting Pakistan’s stable external position.
Moody’s has also highlighted that the country’s financial condition is also improving, due to the expansion of taxes. Prime Minister Shahbaz Sharif has expressed happiness over the improvement in Pakistan’s credit rating. And along with this, he also appreciated the efforts of the country’s economic teams.
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