The markets have rejected the horseshit served up by pti propaganda machine about the economy. No, you can't blame this on pmln as it is the govt's ability to produce future value that has been downgraded. The dollar devaluation is also an indicator that the markets see less value in pkr in the future. Modys has also given a strong indicator of downgrading.
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Fitch has cut Pakistan’s debt rating deeper into junk territory as the cash-strapped country grapples with a lethal combination of low reserves, elevated debt repayments and a weakening fiscal position.
The rating agency on Friday said it had downgraded Pakistan’s long-term foreign-currency issuer default rating by one notch to B- from B.
The move was in reaction to the country’s rising debt level which is expected to swell due to its weak repayment capacity. At $7.3bn, Pakistan’s foreign currency reserves have dropped to the critical level of around one and a half month of import cover.
Over the next three years, the country’s sovereign debt-service obligations will range between $7bn-$9bn per year, which includes a $1bn Eurobond repayment due in April 2019.
Fitch said that “rupee depreciation, lower oil prices and newly imposed import duties will drive a deceleration in imports, while exports are likely to strengthen gradually.” However, the credit agency added in its statement that this may not be sufficient to re-build reserve buffers sustainably.
This week the global credit rating agency Moody’s also said that it was considering downgrading Pakistan’s external credit rating.
Back in October, Pakistan requested a bailout from the International Monetary Fund. This was expected by mid-January, but Fitch’s research arm said this could be delayed till the end of March.
If successful, it could mean attracting further financing and budget support from the World Bank and the Asian Development Bank. But if the deal falls through, the country’s foreign-exchange reserves would continue to drop.
https://www.ft.com/content/7eb2837a-ff91-11e8-ac00-57a2a826423e
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Fitch has cut Pakistan’s debt rating deeper into junk territory as the cash-strapped country grapples with a lethal combination of low reserves, elevated debt repayments and a weakening fiscal position.
The rating agency on Friday said it had downgraded Pakistan’s long-term foreign-currency issuer default rating by one notch to B- from B.
The move was in reaction to the country’s rising debt level which is expected to swell due to its weak repayment capacity. At $7.3bn, Pakistan’s foreign currency reserves have dropped to the critical level of around one and a half month of import cover.
Over the next three years, the country’s sovereign debt-service obligations will range between $7bn-$9bn per year, which includes a $1bn Eurobond repayment due in April 2019.
Fitch said that “rupee depreciation, lower oil prices and newly imposed import duties will drive a deceleration in imports, while exports are likely to strengthen gradually.” However, the credit agency added in its statement that this may not be sufficient to re-build reserve buffers sustainably.
This week the global credit rating agency Moody’s also said that it was considering downgrading Pakistan’s external credit rating.
Back in October, Pakistan requested a bailout from the International Monetary Fund. This was expected by mid-January, but Fitch’s research arm said this could be delayed till the end of March.
If successful, it could mean attracting further financing and budget support from the World Bank and the Asian Development Bank. But if the deal falls through, the country’s foreign-exchange reserves would continue to drop.
https://www.ft.com/content/7eb2837a-ff91-11e8-ac00-57a2a826423e