(Reuters) – Global ratings agency Fitch on Friday downgraded Pakistan’s sovereign credit rating to “CCC+” from “B-“, citing a further deterioration in the country’s external liquidity and funding conditions and a drop in foreign exchange reserves .
Fitch does not generally assign outlooks to sovereigns rated ‘CCC+’ or below.
The recent widespread floods in Pakistan have further weakened the country’s economy, which is already in turmoil, with a rising current account deficit and higher inflation than 20%, and the currency depreciated sharply. Rupee currency.
Flooding has killed 1 person, 700 and caused more than 30 $1 billion in damage to the economy, the agency said, will destroy Pakistan’s efforts to rein in its twin fiscal and current account deficits.
On the policy front, Fitch said it assumed Pakistan would continue to receive payments under its IMF program, but the risk of this scenario has risen .
The Asian Development Bank (ADB) has committed up to $2.5 billion to Pakistan, of which $1.5 billion will be available next week through its BRACE program.
