Moody’s changes Pakistan’s rating outlook to stable

SINGAPORE: Moody's Investors Service has revised the outlook on Pakistan's foreign currency government bond rating to stable from negative. The rating is affirmed at Caa1. Concurrently, Moody's has affirmed the government's issuer rating and senior unsecured rating at Caa1.

Moody's decision to revise the outlook on Pakistan's foreign currency rating is primarily based on a stabilization in the country's external liquidity position. This is supported by the government's strong commitment to reforms under an ongoing program with the International Monetary Fund (IMF).

The continued implementation of structural reforms under the program would ensure additional tranche disbursements, further buffering Pakistan's foreign reserves.

Pakistan's country ceilings remain unchanged. The long-term, local-currency bond and deposit country ceiling is affirmed at B1, while the long-term foreign currency bond and deposit ceilings are affirmed at B3 and Caa2 respectively. All short-term ceilings are also affirmed at Not Prime.

The Local Currency Country Ceiling refers to risks affecting a given country that arise from political, institutional, financial and economic factors either within the country or externally. These ceilings act as a cap on ratings that can be assigned to the foreign- and local-currency obligations of entities domiciled in the country.