External pressure over Pakistan economy threatening stability

External pressure over Pakistan economy threatening stability

ISLAMABAD - External pressure over Pakistan economy threatening stability, a new report has revealed.

Pakistan’s foreign exchange reserves continue to remain vulnerable of external pressures, while liquidity risks also remain high, said Moody’s in a periodic review of the country.

“The country has high susceptibility to event risk driven by heightened external vulnerability as external pressures continue to weigh on the country’s foreign-exchange reserve adequacy, while political and government liquidity risks remain elevated in Pakistan,” the Moody’s document, available with a private media outlet link, stated.

Moody’s Investors Service reviews its ratings periodically in accordance with regulations – either annually or, in the case of governments and certain EU-based supranational organisations, semi-annually.

This development comes as no surprise as Pakistan’s economy is continually taking a beating, which is evident in the deteriorating key macroeconomic indicators and the country’s weak fiscal position.

Moody’s did not announce any credit rating for the country. The agency had maintained ‘B3 negative’ credit rating for Pakistan due to heightened external vulnerability risk. However, earlier, it had hinted at a further downgrade if the country’s external position continued to weaken and erosion of foreign exchange reserves.