The global investors services, Moody’s, has demoted Pakistan in the sovereign credit rating from B3 to Caa1 due to the rise in liquidity of the government and vulnerability risks from external sources. The devastating floods across Pakistan aided in worsening the situation.
The New York-based rating agency stated that the liquidity of Pakistan, the external credit weaknesses, and the hike in social spending needs have been exacerbated because of recent floods. It added that the revenue of the government has also suffered. Pakistan entered the C-category after seven years. Interestingly both times, PML-N held the leadership throne of the country.
Finance Minister Ishaq Dar said that officials of the rating agency have to meet him. Dar added that he told them if the rating was not reversed they would receive a befitting reply. He urged the nation to stay calm as the rating was more about the Sukuk Bonds and the government was not planning to take that direction.