กรุงเทพฯ--17 ส.ค.--Moody's
Moody's Investors Service has changed the outlook for Pakistan's B3 foreign and local currency sovereign bond ratings to stable from negative.
Moody's has also changed to stable from negative the outlooks on the B3 country ceiling for foreign currency bank deposits and the B1 country ceiling for foreign currency debt.
"The stable outlook was prompted by the recent augmentation of Pakistan's IMF program by $3.2 billion to more than $11 billion, and several ongoing policy and structural reforms" said Mr. Aninda Mitra, a Moody's Vice President and Sovereign Analyst for Pakistan. Meanwhile, remittance inflows from overseas Pakistanis have remained strong.
These developments avert the likelihood of external payment arrears over the next 12 to 18 months, and they provide greater re-assurance about the finance-ability of Pakistan's current account and fiscal deficits.
Mitra added that the IMF program augmentation would help to safeguard foreign currency reserve adequacy against the risks of further deceleration in private capital flows or delays in bilateral assistance while also providing bridge financing for fiscal requirements.
"Despite a weak external environment and an ongoing insurgency in the northwestern regions of the country, Pakistani authorities are implementing several policy and structural reforms," said the analyst, adding that "the reduction of subsidies, pass-through of market prices, and better targeting of social welfare programs would more effectively underpin future macroeconomic stability."
Mitra also noted that Pakistan's civil and state institutions appeared to be coalescing, and that a socio-political consensus was firming against religious extremism. In Moody's opinion, Pakistan's ability to stabilize its political institutions and forge a robust response to Islamic militancy carries a substantial humanitarian cost, but such developments are gaining international confidence in the country's state and political institutions.
Moody's last rating action on Pakistan was on December 12, 2008, at which time the outlook was changed to negative following a review for possible downgrade.
The principal methodology that Moody's uses in rating the government of Pakistan is its Sovereign Bond Methodology, which can be found at www.moodys.com in the Credit Policy & Methodologies directory. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Credit Policy & Methodologies directory on Moody's web site.
Singapore
Aninda S. Mitra
Vice President - Senior Analyst
Sovereign Risk Group
Moody's Singapore Pte Ltd.
JOURNALISTS: (852) 2916-1150
SUBSCRIBERS: (65) 6398-8308
Singapore
Thomas J. Byrne
Senior Vice President - Regional Credit Officer
Sovereign Risk Group
Moody's Singapore Pte Ltd.
JOURNALISTS: (852) 2916-1150
SUBSCRIBERS: (65) 6398-8308