S&P raises Pakistan's credit rating

[Naveed Yaseen]

HONG KONG/KARACHI: Standard & Poor’s has raised Pakistan’s sovereign rating by one notch to B minus, citing improvements in its external liquidity and reduction in its fiscal deficit.

The decision came a week after Moody’s Investors Service raised its rating outlook for Pakistan to stable from negative and after the country received an increase in a loan from the International Monetary Fund (IMF).

S&P said the IMF loan agreement and donor commitment had helped reduce the risk of near-term external payment difficulties for Islamabad.

“The upgrade is mainly due to the approval of the loan by the IMF last month. It would help Pakistan with the balance of payment deficit it is facing,” said Mohammed Sohail, chief executive at Topline Securities Ltd.

S&P said the upgrade reflected Pakistan’s “successes in implementing corrective policy measures to rectify an unsustainable fiscal trajectory that evolved amid the political transition and associated instability of the recent past”.

The country’s main stock market, KSE, was up 1.71 percent at 8254.89 points, a high for the year, as investors were encouraged by the rating increase. reuters

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