Moody's lifts Pakistan sovereign rating to B3 from Caa1, cites governance improvement and easing of external risk

Global ratings agency Moody’s lifted Pakistan’s sovereign rating to ‘B3’ from ‘Caa1’ on Monday, citing improvements in governance and easing external vulnerability risks.

The agency maintained the country’s outlook at ‘stable’.

The development comes only a month after S&P Global Ratings upgraded Pakistan’s long-term sovereign credit rating to ‘B’ from ‘B-’, citing an improving external position and gradual macroeconomic stabilisation, while also assigning a stable outlook.

A country’s sovereign credit rating serves as an indicator of its financial health for foreign investors. It assesses creditworthiness — the risk involved in lending money to the country, evaluated by its ability to repay its debts. Upgrading this rating gives global lenders greater confidence in the economy, helping the country attract foreign investment and borrow funds on better terms.

More to follow.