The global rating agency, Moodyآ’s on Monday upgraded the outlook of Pakistan's economy to stable from negative, said report.
The report published by the global agency on the progress of Pakistan's economy said that the country's foreign exchange reserves had significantly improved and its current account deficit was also under control. The report further said that the issuance of Euro bonds had given a support of USD 2 billion to Pakistan's economy.
The report by Moodyآ’s said, "Moody's decision to revise the outlook on Pakistan's foreign currency rating is primarily based on a stabilization in the country's external liquidity position, supported by the government's strong commitment to reforms under an ongoing programme with the International Monetary Fund." Pakistan sovereign dollar bonds due in 2019 were half a point higher at 103.5-104.5 cents on the dollar for a yield of around 6.3 per cent. The bonds due in 2024 were also half a point higher at 104.75-105.75 for a yield of around 7.5 percent. Moody's report said that the government's issuer rating and senior unsecured rating remained at Caa1.
Pakistan's foreign exchange reserves increased to USD 9 billion by the end of June 2014 from a low of USD 2.9 billion in early February 2014. According to an economic expert Maqsood Qadir, Pakistan has been benefited by the new IMF programme, auctioning of 3G and 4G licenses and a USD 2 billion Eurobond sale in April.
The Finance Minister Ishaq Dar said that the upgrade was a vote of faith in the government's reform programme, said Finance Ministry statement. He further said, "As a result of hard work, commitment and financial discipline introduced by the government that the world has changed its outlook towards Pakistan." In the latest report by Moodyآ’s, it stated that the country had managed to attract foreign investment on improved financial indicators and with a steady economic performance; there was the possibility of credit rating improvement. Earlier in May, Moodyآ’s gave a negative outlook on Pakistanآ’s economy stating that Pakistanآ’s آ‘Caa1آ’ government bond rating with a negative outlook reflected its very low institutional and fiscal strength, its weakened external position and large government financing needs.