KARACHI: An American credit rating agency, Fitch Ratings on Wednesday issued Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘CCC’.
The key rating that assisted the currency positively was Pakistan’s IMF staff-level agreement (SLA) in November, which was approved by the IMF Executive Board in July 2023.
In a statement, the rating company also said that it expects Pakistani authorities to complete the ongoing standby programme with the International Monetary Fund (IMF) — a crucial deal that kept the South Asian nation from defaulting on its sovereign debt.
The company said it expects elections to take place as scheduled in February and a follow-up IMF programme to be negotiated quickly after the current agreement finishes in March 2024,
“But there is still the risk of delays and uncertainty around Pakistan’s ability to do this. The elections could endanger the durability of recent reforms and leave room for renewed political volatility,” the ratings company said.
“The successful programme review reflects continued fiscal consolidation, energy price reforms in the face of a public backlash, and moves towards a more market-determined exchange rate regime,” it added.
With the IMF board to meet on January 11 to discuss Pakistan’s loan approval, Fitch said it is expected that the process will be “unproblematic”.
