The reason it cited it were increased government liquidity and external vulnerability risks in the wake of devastating floods that hit Pakistan in August.
Pakistan said it “strongly contests” a ratings downgrade by rating agency Moody’s on Friday. It also added that it had sufficient liquidity and financing arrangements to fulfil the external liabilities in spite of being affected by catastrophic floods.
Moody’s slash Pakistan’s sovereign credit rating by one notch to Caa1 from B3 on 6 October. The reason it cited it were increased government liquidity and external vulnerability risks in the wake of devastating floods that hit Pakistan in August.
“Moody’s carried out the rating action unilaterally without prior consultations. It did not hold meetings with our teams from the Ministry of Finance and State Bank of Pakistan,” said Pakistan’s finance ministry in a statement via Twitter post.
The statement also noted that post Moody’s intimation such action was on its way, the finance ministry held two meetings with the agency’s team to share data and information which described it as “clearly contradicting” the downgrade.
The ministry said that as the loss assessments were incomplete, factoring against the impact of the floods at this point was “premature”. And also added that all financing requirements would be met.