The currency bond outlook has been revised citing stabilization in the country’s external liquidity position.
According to Moody’s statement “The current-account deficit is modest, estimated at 1.0 per cent of GDP for the fiscal year ended June 2014, while financial inflows have increased due to a $2 billion Eurobond sale earlier this year, privatization proceeds, and multilateral and bilateral funding.”
“Importantly, repayments to the International Monetary Fund (IMF) from the previously suspended program are tapering off, even as disbursements from the ongoing program continue,” added Moody’s.
However, the rating was affirmed at Caa1 citing large fiscal imbalances and weak debt metrics.
Moody’s had downgraded Pakistan by one notch in July 2012 citing deterioration in the external liquidity position, due to a widening current-account deficit, large outflows from the financial account and a decline in international reserves to very low levels.