After the decline in the nation’s foreign exchange reserves and the rise in the danger of the repayment of foreign debt defaulting, Moody’s Investors Service has lowered the government of Pakistan’s local and foreign currency credit ratings from Caa1 to Caa3, respectively.
Yet, according to a statement on Tuesday, the global rating agency “adjusted the outlook to stable from negative.”
The agency also lowered the senior unsecured MTN program’s rating from (P)Caa1 to (P)Caa3, which is a worse rating.
According to Moody’s, Pakistan’s increasingly precarious liquidity and external situation significantly increase default risks to a level consistent with a Caa3 rating, which is why the decision to lower the ratings was made.
