Exciting news for Pakistan as Moody’s, a top global rating agency, upgraded the country’s local and foreign currency ratings to Caa2 from Caa3. This upgrade comes as a result of Pakistan’s improving macroeconomic conditions and better government liquidity and external positions.
Mood’s decision was influenced by the country’s reduced default risk and increased certainty on external financing following an agreement with the IMF for a $7 billion extended fund facility. The agency stated that Pakistan’s foreign reserves have doubled since June 2023, although they still need improvement to meet external financing needs.
The positive outlook reflects the possibility of further reducing government liquidity and external vulnerability risks through sustained reform implementations. Additionally, Saudi Arabia and the UAE have pledged $15 billion to boost Pakistan’s foreign exchange reserves.
Prime Minister Shehbaz Sharif praised the rating upgrade, attributing it to the hard work of the economic team and focusing on national interests over political gains. He expressed confidence in the economy’s positive trajectory and commended the finance minister for overall economic improvements.