Moody’s upgrades rating to B3 on governance

Business Recorder reported that Moody's Ratings has raised Pakistan's sovereign credit rating to B3 from Caa1, the highest level in four years. The agency linked the move to better governance, a stronger external cushion and steady macroeconomic stabilisation. It kept the outlook at stable.

Reserves climbed to roughly USD17 billion by late July 2026, compared with USD14 billion a year earlier, enough to cover close to three months of imports. The agency's external vulnerability gauge dropped from 230 percent in 2025 to roughly 145 percent in 2026. Interest payments consumed roughly 35 percent of public revenue in fiscal 2026, while the share in fiscal 2025 stood at 49 percent.

Moody's said its stable outlook weighs faster possible improvement against risks that might hamper borrowing in foreign currency. The rating remains constrained by a structurally fragile external position, a narrow revenue base and limited attraction for investment. The upgrade also applies to the backed foreign currency senior ratings of The Pakistan Global Sukuk Programme Co Ltd, which carries a stable outlook.