Moody's upgraded Pakistan's dollar bonds rating one notch from stable to positive on Wednesday on the back of the country's improving macroeconomic indicators. The financial ratings firm said its decision came in view of Pakistan's strengthening foreign exchange reserves.
Militant-plagued Pakistan has been trying to boost its flagging economy since Prime Minister Nawaz Sharif was elected nearly two years ago. "Moody's Investors Service has revised the outlook on Pakistan's foreign currency government bond rating to positive from stable," the company said in a statement. Pakistan issued $1 billion in five-year Sukuk Bonds, the Islamic version of eurobonds, in November last year to boost foreign exchange reserves. In April 2014, the country issued $2 billion worth of eurobonds, in five and 10 year terms, Pakistan's net foreign currency reserves with the central State Bank reached to $11.2 billion up to March 13, from just $3.2 billion in January 2014. The International Monetary Fund (IMF) has voiced satisfaction with Pakistan's progress on reforms required under a $6.6-billion bailout agreed in 2013. The loan came on condition that Pakistan - which was suffering an energy crisis - would carry out extensive economic reforms, particularly in the energy and taxation sectors. Moody's said continued success under the IMF programme would act as "upward triggers to the rating." The central State Bank of Pakistan on the weekend slashed its benchmark interest rates by half a percentage point to 8 percent.