Moody's lifts Pakistan sovereign rating to B3 from Caa1, cites governance improvement and easing of external risk
Moody's lifts Pakistan sovereign rating to B3 from Caa1, cites governance improvement and easing of external risk.
Moody's lifts Pakistan sovereign rating to B3 from Caa1, cites governance improvement and easing of external risk.
Article outline
- What happened
- Official response
- Why it matters
- The bottom line
Key points
- ReutersNews Desk Published August 24, 2026 Updated August 24, 2026 04: 27pm.
- "After S&P, Moody's also upgrades Pakistan Sovereign Ratings to B3 from Caa1, " he wrote.
- Global ratings agency Moody's lifted Pakistan's sovereign rating to 'B3' from 'Caa1' on Monday, citing improvements in governance and easing external vulnerability risks.
- Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and throughout the world.
- Adviser to the Finance Minister Khurram Schehzad additionally shared the development in a post on X.
ReutersNews Desk Published August 24, 2026 Updated August 24, 2026 04: 27pm. Join our Whatsapp Channel. Add Dawn as a trusted source.
Global ratings agency Moody's lifted Pakistan's sovereign rating to 'B3' from 'Caa1' on Monday, citing improvements in governance and easing external vulnerability risks. The agency maintained the country's outlook at 'stable'.
"We expect the recent improvement in Pakistan's debt affordability to be durable, underpinned by sustained macroeconomic stability, " the agency remarked in an official note.
While additionally assigning a stable outlook, the development comes only a month after S&P Global Ratings upgraded Pakistan's long-term sovereign credit rating to 'B' from 'B-', citing an improving external position and gradual macroeconomic stabilisation.
In practice, a country's sovereign credit rating serves as an indicator of its financial health for foreign investors. It assesses creditworthiness – the risk involved in lending funds to the country, evaluated by its ability to repay its debts. Upgrading this rating gives global lenders greater confidence in the economy, helping the country attract foreign investment and borrow funds on better terms.
For now, moody' s lifts Pakistan sovereign rating to B3 from Caa1, cites governance improvement remains the part of the story worth watching, and further updates are likely as more details are confirmed.
