Moody’s Lifts Pakistan’s Rating to ‘Caa1’ on Stronger External Finances
Moody’s cited Pakistan’s economic reforms, IMF support, and rising foreign exchange reserves of $14.3 billion as key factors behind the credit rating upgrade to Caa1 with a stable outlook.
- On Wednesday, Moody’s Ratings upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa1 from Caa2, raising country ceilings to B2 and Caa1 from B3 and Caa2.
- Recently, similar upgrades by S&P Global Ratings and Fitch Ratings paved the way, credited to reforms under the IMF Extended Fund Facility programme, Moody’s Ratings said on Wednesday.
- On July 25, 2025, Pakistan’s foreign exchange reserves surged to $14.3 billion, covering around ten weeks of imports, supported by IMF reviews unlocking $1 billion in May and June, while debt servicing costs eased to 45%.
- Alongside this, the Government of Pakistan’s outlook was revised to stable from positive, reflecting Moody’s cautious optimism on the country's economic trajectory.
- Moody’s projects Pakistan’s fiscal deficit to narrow to about 4.5-5% of GDP in FY2026 but cautioned reform delays could jeopardize funding.
22 Articles
22 Articles
Moody’s upgrades Pakistan’s credit rating to ‘Caa1’, finance minister
Moody’s said on Wednesday it had raised Pakistan’s credit rating by one notch to ‘Caa1’ from ‘Caa2’ due to an improving external financial position and it assigned the country a “stable” outlook. The announcement came within hours of Pakistan’s Finance Minister Mohammed Aurangzeb saying there was more room for the central bank to cut the country’s key policy rate from 11
Moody's upgrades Pakistan's credit rating to Caa1 with stable outlook
Global rating agency Moody's Investor Service has upgraded Pakistan's sovereign credit rating by one notch, moving it from CAA2 to CAA1 with a stable outlook. This upgrade signals a marginal improvement in the South Asian nation's ability to meet its debt obligations. The decision reflects an expectation that Pakistan's fiscal and external position will remain manageable in the near term, supported by continued support from the IMF and an improve
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