Improving inflows: Moody's changes Pakistan's rating outlook to 'stable'

Published: July 14, 2014

The decision was taken primarily based on the stabilization in the country's external liquidity position, said Moody's. PHOTO: AFP/FILE

Global financial rating agency Moody’s Investors Service has revised the outlook on Pakistan’s foreign currency government bond rating to stable from negative.

Pakistan’s rating has been affirmed at ‘Caa1′. Concurrently, Moody’s has affirmed the government’s issuer rating and senior unsecured rating at Caa1.

According to the statement issued by the financial agency on Monday, the decision to revise the outlook on Pakistan’s foreign currency rating was taken primarily based on the stabilisation in the country’s external liquidity position.

The body noted that Pakistan’s current account deficit is modest at estimated 1.0 per cent of GDP for the for the fiscal year ending June 2014, while financial inflows have also increased due to a $2 billion Eurobond sale earlier this year, privatisation proceeds. Importantly, repayments to the IMF from the previously suspended program are tapering off, while disbursements from the ongoing program continue.

As a result of Eurobond sale, proceeds from privatisation along with disbursements from IMF, Pakistan’s foreign reserves have risen from a low of $2.9 billion in early February 2014 to $9.0 billion by the end of June 2014.

Dar welcomes Moody’s decision

The Minister for Finance Ishaq Dar appreciated and welcomed the revision of Pakistan’s foreign currency government bonds rating from negative to stable by Moody’s Investors Service.

“As a result of hard work, commitment and financial discipline introduced by the government that the world has changed its outlook towards Pakistan,” said Dar.

He said that with the over subscription of Euro Bond, successful auction of 3G/4G Spectrum, divestment of GOP shares, tax and energy sector reforms and improved economic indicators, the international confidence in Pakistan has increased to a level where we can build stronger economic base.

Reader Comments (16)

  • Shahzad
    Jul 14, 2014 - 8:29PM

    Tahir Ul Qadri announced hunger strike against this..IK announced dharna …chaudhri brothers announced long march ..Zaid hamid thinks it’s conspiracy by india to support nawaz

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  • andy
    Jul 14, 2014 - 8:36PM

    With this positive development, I still expect negative comments from fellow users. Good job by the government by the way!!!

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  • Shoaib Tanveer
    Jul 14, 2014 - 8:36PM

    Masha Allah this is called change and a positive one…

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  • Blithe
    Jul 14, 2014 - 8:37PM

    Could we please let this government focus rather than giving disproportionate airtime to IK and TuQ?

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  • LHR
    Jul 14, 2014 - 8:38PM

    Having said that the boyz and galz are very good at nit-picking…… so lets pick faults with this report and discredit it for inner sakoon!!

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  • Jul 14, 2014 - 8:39PM

    If Moody thinks that the infow has done wonder for Pakistani economy and has upgraded it to stable, then the our
    Finance Minister should not succumb to IMF pressure to depreciate
    PAK Rupee & instead SBP should slash Discount Rate by 2 pct, as
    Monetary
    Policy is due this Saturday that will help in economic stimulation

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  • Frank
    Jul 14, 2014 - 8:59PM

    Did Moody’s take into account Dar’s totally fabricated GDP growth figures?Recommend

  • Khan Shahzaib
    Jul 14, 2014 - 9:10PM

    A welcome decision and a good news for Pakistan. Hope and pray the stability continues and those against Pakistan’s stability are doomed.

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  • LHR
    Jul 14, 2014 - 9:27PM

    as expected no nonehals of PTI to comment on this…..and ET not releasing my comment!

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  • hater
    Jul 14, 2014 - 9:33PM

    Haters will hate.. but Daar n co. will continue their good work

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  • Dr Akmal
    Jul 14, 2014 - 10:20PM

    Well done PMLN. We are proud of your hardwork.

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  • pak
    Jul 14, 2014 - 10:46PM

    good…keep it up..

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  • Yasir
    Jul 14, 2014 - 11:38PM

    It means alot if you understand international markets. Great news

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  • sma
    Jul 15, 2014 - 12:16AM

    I hope this too doesn’t involve a “typo”, if you know what I mean :)

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  • xor
    Jul 15, 2014 - 1:05AM

    “disbursements from IMF” speaks alot about this performance.

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  • hunzai
    Jul 15, 2014 - 7:00PM

    Money borrowed from international market by issuing bonds and from IMF speak the truth behind this performance. It simply means that if I borrowed money from a bank to pay my daily routine expenses and the same amnt is initially deposited into my bank acnt will definitely boost my bank balances. I am afraid of how this will be counted as a good performance.

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