Moody’s raises Pak­istan’s out­look to sta­ble

Muscat Daily - - BUSINESS -

Karachi, Pak­istan – Moody’s In­vestors Ser­vice raised Pak­istan’s credit rat­ing out­look to sta­ble from neg­a­tive, cit­ing the In­ter­na­tional Mone­tary Fund (IMF) pro­gramme that helped sta­bilise the econ­omy.

The out­look was changed be­cause of nar­row­ing cur­rent ac­count deficit, cur­rency flex­i­bil­ity and lower ex­ter­nal vul­ner­a­bil­ity risks, Moody’s said on Mon­day. The rat­ings com­pany kept the credit as­sess­ment for the nation at B3, a junk rat­ing.

The South Asian nation more than dou­bled in­ter­est rates and de­val­ued its cur­rency by half in the past two years help­ing sta­bi­lize the econ­omy af­ter a deficit blowout. The cur­rent ac­count turned into a sur­plus in Oc­to­ber for the first time in four years af­ter the nation en­tered a US$6bn IMF bailout pro­gramme.

“This is big for the nation that has been deal­ing with an eco­nomic slow­down,” said Faisal Bil­wani, head of in­ter­na­tional sales at Al­falah CLSA Se­cu­ri­ties. “In­vestor con­fi­dence is chang­ing to pos­i­tive.”

Moody’s ex­pects the nation’s cur­rent ac­count deficit to con­tinue nar­row­ing to av­er­age about 2.2 per cent of GDP in the cur­rent and next fis­cal year com­pared with 5 per cent in fis­cal 2019.

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