Fitch Ratings has announced that it has revised the outlook on Pakistan’s long-term foreign and local currency issuer default ratings to negative from stable and has affirmed ‘B’ rating for both the categories.
In an assessment released on its website on Thursday, Fitch – one of the three big credit rating agencies – said it revised the outlook because since the completion of Pakistan’s three-year International Monetary Fund (IMF) Extended Fund Facility in September 2016, there had been a partial reversal of gains made under the programme.
In particular, foreign currency reserves of the country have declined and fiscal deficit has widened.
The IMF had provided a loan of $6.2 billion under the programme to help shore up Pakistan’s shrinking foreign currency reserves.
Though measures had recently been taken to address these trends, including some currency depreciation, tax rebates on exports and import duties on non-essential goods, these proved insufficient thus far to arrest the ongoing decline in reserves, Fitch said.