Moody's to keep Pakistan's rating unchanged

[Naveed Yaseen]

KARACHI (August 12 2008): Moody's will maintain its rating for Pakistan despite political and economic problems facing the nuclear-armed country, a senior analyst from the ratings agency said on Monday. Moody's downgraded Pakistan's rating to B2 from B1 in May because of growing economic imbalances and political difficulties that analysts say have plagued the government that came to power after the February elections.

"B2 is a stable outlook and that's the way it's going to stay for now," Aninda Mitra, a senior analyst with Moody's Sovereign Risk Unit, told Reuters. Mitra said the rating adequately captured the political risk the country was facing, and while dwindling forex reserves were a matter of concern, steps were being taken to address problems.

"We are also mindful of a lot of corrective measures being put together such as the reduction of fuel subsidies, the increase in GST (general sales tax) and so on, and the SBP (the State Bank of Pakistan central bank) has also tightened policy," Mitra said.

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