Global rating agency Fitch downgraded Pakistan’s rating from B minus to triple C plus.
Fitch Ratings has downgraded Pakistan’s long-term foreign currency issuance default rating (IDR) to CCC plus from ‘B’ minus.
Fitch Ratings says it does not normally issue an outlook on a rating of ‘CCC’ plus or below.
According to Fitch, the downgrade reflects a further deterioration in Pakistan’s external liquidity and funding position and a decline in foreign exchange reserves. This is partly the result of large-scale flooding that will undermine Pakistan’s efforts to reduce fiscal and current account deficits.
According to Fitch, State Bank of Pakistan’s foreign exchange reserves stood at around US$7.6 billion as of October 14, 2022, which is equivalent to one month’s external payments.
In July this year, the American rating agency Fitch downgraded Pakistan’s outlook from stable to negative.