Moody’s downgrades Pakistan’s rating outlook to negative
KARACHI: Moody’s Investors Service has downgraded Pakistan’s rating to negative from stable. A statement released by the credit rating agency in the evening on Wednesday stated that the decision to change the outlook to negative was driven by heightened external vulnerability risk as ongoing balance of payment pressures erode foreign exchange buffers.
The rating agency expects the government’s tax amnesty scheme — due to expire on June 30 — to have a modest impact of around $2-3 billion in foreign exchange inflows.
Moody’s said that the foreign exchange reserves have fallen to low levels and in the absence of significant capital inflows ‘would will not be replenished over the next 12-18 months’.
穆迪预测，巴基斯坦政府于6月30日到期的税收赦免计划对外汇流入产生的影响有限，将在20 - 30亿美元左右。
Rating of B3 reaffirmed for local and foreign currency debt
“Low reserves adequacy threatens continued access to external financing at moderate costs, in turn potentially raising government liquidity risks”.
Moody’s affirmed the B-3 local and foreign currency long-term issuer and senior unsecured debt ratings. It said that the decision to affirm the B3 rating reflects Pakistan’s robust growth potential, supported by ongoing improvements in the energy supply and physical infrastructure, which are likely to raise economic competitiveness over time. “These credit strengths balance Pakistan’s fragile external payment position and very weak government debt affordability owing to low revenue generation capacity”.
Concurrently, Moody’s affirmed the B3 foreign currency senior unsecured ratings for the Second Pakistan International Sukuk Co. Ltd. and the Third Pakistan International Sukuk Co. Ltd. “The associated payment obligations are, in our view, direct obligations of the government of Pakistan,” Moody’s argued.
Pakistan’s Ba3 local currency bond and deposit ceilings remain unchanged. There was no change in the B2 foreign currency bond ceiling and the Caa1 foreign currency deposit ceiling.
The short-term foreign currency bond and deposit ceilings also remain unchanged at Not-Prime. “These ceilings act as a cap on the ratings that can be assigned to the obligations of other entities domiciled in the country,” Moody’s concluded.
Ashima Khatoon, Lucknow-2 days ago
Looks serious situation for Pak.. your finances are dipping... to dangerous levels!..
Mahmood-2 days ago
That is bound to result in a negative mood for the business community in the country. With exports falling and borrowing at record high; cash reserves at their lowest while Rupee at record low against major foreign currency, the outlook does not look good!
PrakashG-2 days ago
More borrowings from China on the cards as no one else is willing to bail Pakistan out, giving China more leverage over Pakistan's industry and economy. The game has already changed irreversibly.
Sachin Tandon-2 days ago
Negative rating for Pakistan by Moody's is not at all surprise to any one, as every one knows the financial condition of Pakistan.
Mazir Ahmed-2 days ago
CPEC will solve all this..
ABE-2 days ago
@Mazir Ahmed Some people in Pakistan are so bought into the idea of CPEC that they have dellusional about the prospects of this project elevating Pakistan into Dubai in a matter of years.
Keep dreaming. If you think the country is gong to look like Dubai in a few yaers, with a Mercedes in every garage, than ask yourself: 'Why do people like Zardari, NS and thousands of richest Pakistanis have invested over $30 billion outside of Pakistan'?
Taimur-2 days ago
Political stability is important for economic progress. Battle for throne between Imran Khan and Nawaz Sherif is the reason for this downfall. Both have their children abroad so Pakistanis must consider the future of their children while voting as they have to remain in Pakistan
RN-2 days ago
@ABE You missed the point in his comment... "Sarcasm".
ishrat salim-2 days ago
This was expected as predicted by most of our economic experts, but the govt in power then was never serious in taking steps to avoid this situation.
ishrat salim-2 days ago
@Mazir Ahmed That is what many people like you think, it is never to going to be like that.
@Mazir Ahmed 很多人都有你这种想法，不过这是不可能的。
Tirudon-2 days ago
Rather than focusing on education, healthcare, industries and agriculture, Pakistan is busy focusing on international relations with India, US and others. Keep the international relations aside, and focus on these key areas. they will not only improve the quality of life, but also add to gdp. For instance think of how much education and healthcare adds to GDP as well, besides having social values. With improvement in business environment and employee skills, Pakistan can also attract good FDI. High time, the country should check its priorities and focus on the right areas.
RAJA CHILL-2 days ago
And the result stock market has tumbled almost 3% in two days.Next would be higher bond interest rates for loans.
Aslam Qadri-2 days ago
The only two factors over and above corruption are Religious bigotry and Population, if you are sincere two these two aspects, your outlook in terms of FDI will improve overnight.
Dr BN Anand-2 days ago
The realty of hard times ahead stares people of Pakistan. They can not afford to live any more in denial.
Orpheus-2 days ago
Don't worry. CPEC is coming...
KPN-2 days ago
@Mazir Ahmed Silently moving in to debt trap of Chaina!. Wake Up guys... Wake Up!
@Mazir Ahmed 悄悄落入中国的债务陷阱！醒醒吧，伙计！
Ats-2 days ago
This is India's conspiracy against Pakistan...
Saad Khan-2 days ago
@PrakashG It's Dar and Nawaz Sharif blunders, must be accountable and I would go further, confiscate all their assets towards Pakistan's debt servicing.
Emerging Pakistan-2 days ago
I see how Indian are feeling happy about this, this is pure evil from you guys. Inshallah your happiness is going to turn out temporary, don't worry no one can undo us. You guys know that.
Zak-2 days ago
@Mazir Ahmed : I agree with you. Otherwise there is too much of an unnecessary negative outlook.
@Mazir Ahmed : @Mazir Ahmed : 我同意你的观点，否则就会有太多不必要的负面展望。
Deva-2 days ago
@Emerging Pakistan no one feel happy if someone is trouble at least Hindu dont feel like that for sure.
@Emerging Pakistan 没人会幸灾乐祸，至少印度人肯定不会。
Ali-2 days ago
@Emerging Pakistan : we don't need anyone to undo us. We r doing it ourselves. We have sold ourselves to China!
@Emerging Pakista 不需要别人来扰乱我们，我们自己已经乱了，都把自己卖给中国了。
Ali-2 days ago
Soon Karachi and Lahore will be sold to china
Iftikhar Husain-2 days ago
The caretaker government must call an emergency meeting of all brains of the country in finance and chalk out a master plan and stick to the plan. This will boost the confidence of the world market.
Farhan-2 days ago
CPEC will make us rich. Thanks China!
Marcus-2 days ago
We appreciate your concerns and what would be most helpful is if you really really care about us let us know how much Nawas Sharif has invested in your country please.
A shah-2 days ago
This is false propaganda. We have have CPEC and will be a superpower in a couple of years
Ali-a day ago
Thanks to 5-year PML-N government.
Sat-a day ago
@Marcus Find out and take back all.
Jai Ho-a day ago
Raj-a day ago
Congrats Pakistan. Atleast you got listed.