The State Bank of Pakistan (SBP) on Friday has said that Moody Investor Service (Moody’s) action of placing Pakistan’s sovereign rating under review has nothing to do with ‘Pakistan specifically’, as the country’s fundamentals, policy settings or outlook are viewed in very complimentary terms by the rating agency.
“Moody’s has placed Pakistan’s sovereign rating under review. As they note, this is not in any way because of Pakistan’s fundamentals, policy settings, or outlook, all of which are viewed in very complimentary terms by Moody’s,” said the SBP in a series of tweets.
“Indeed, the action has nothing to do with Pakistan specifically. The only driver is Moody’s global approach of placing all countries that are expected to participate in the G20 debt relief initiative under review.
2/2Indeed, the action has nothing to do with Pakistan specifically. The only driver is Moody’s global approach of placing all countries that are expected to participate in the G20 debt relief initiative under review.
— SBP (@StateBank_Pak) May 15, 2020
Moody’s Investors Service (Moody’s) has placed the government of Pakistan’s local and foreign currency long-term issuer and senior unsecured B3 ratings under review for downgrade.
Moody’s in its latest report on Pakistan stated that the driver for the review for downgrade is its expectation that Pakistan will request bilateral debt service relief from G20 creditors under the recently announced initiative and the associated possibility of losses to private-sector creditors.
The initiative offers benefits for the world’s poorest nations, many of which have large external payment obligations and are exposed to outflows of capital and depreciating exchange rates during this unprecedented shock. Additional financial support and liquidity relief will allow fiscal resources to be devoted to essential health efforts and towards minimizing the economic and social impact of the outbreak.