Moody’s, Fitch warn of risks despite IMF deal

Two leading global rating agencies have warned that Pakistan will require significantly more funds than what it’s receiving from the International Monetary Fund (IMF) to meet its debt maturities and to finance its economic recovery, reported Bloomberg on Monday. Moody’s Investors Service and Fitch Ratings that issued the warning are two of the big three credit rating agencies, recognised by the US Securities and Exchange Commission. The two agencies noted that Pakistan has to repay $25 billion in the current fiscal year to meet its debt obligations. The repayments include both principal and interest, and are about seven times Pakistan’s foreign exchange reserves, according to Moody’s. This is significantly more than the initial approval of a $3bn IMF loan Pakistan secured last week. The programme is still subject to approval by the IMF Executive Board “Pakistan will require significant additional financing besides the IMF disbursements to meet its debt maturities and finance an economic recovery,” said Krisjanis Krustins, director of sovereigns for Asia and the Pacific region at Fitch.