Fitch downgrades country’s IDR to ‘CCC+’

KARACHI: Fitch Ratings has downgraded Pakistan’s long-term foreign-currency issuer default rating (IDR) to ‘CCC+’ from ‘B-‘ on the day the Asian Development Bank (ADB) approved financing of $1.5 billion for the country and the Financial Action Task Force (FATF) upgraded Islamabad to its white-list from the grey one. “The downgrade reflects further deterioration in Pakistan’s external liquidity and funding conditions, and the decline of foreign-exchange reserves,” the global rating agency said in an announcement on Friday. “Fitch typically does not assign outlooks to sovereigns with a rating of ‘CCC+’ or below,” it added. The FATF’s decision to having relocated Islamabad to white-list is expected improve foreign currency inflows including from investors abroad. Fitch announced its latest rating action following Moody’s Investors Service downgrading Pakistan’s credit rating to ‘Caa1’ from ‘B3’ some two weeks ago. Finance Minister Ishaq Dar and his team had found the decision “unilateral” and said the verdict was based on “incomplete information”. Dar and his team had updated that Pakistan was under the International Monetary Fund (IMF) loan programme, while the country had full arrangements worth around $36-40 billion to repay foreign debt, finance current account deficit (CAD) and boost foreign exchange reserves in FY23. – MD