Moody’s cuts Pakistan’s rating to Caa1 citing increased govt liquidity and external vulnerability risks

[Paitoo]

All these ratings are for phuddoo investors like you and me. Bada paisa jahan jaana hai, wahan jaata hai.

 

[ghazi52]

.,.,

 

[Baba_Yaga]

https://www.researchgate.net/figure/Sovereign-credit-ratings-during-the-euro-crisis-The-rating-data-have-been-retrieved-from_fig1_325975267

Quite a bit of spread in ratings my friend. I wouldn’t hire anyone that passes at 51 either mind you. And if I do, I would mind hiring someone who fails at 49.

Well most graders wouldn't hesitate to give extra 1-2 points to anyone who is at 49. If they actually give you 49 and let you fail, it means you are really shit, so again, a big difference between 51 and 49.,,

 

[epebble]

Not surprised at all with introduction of PDM

It is not a function of which political party is in power. If you see https://countryeconomy.com/ratings/pakistan it is apparent that PK never had investment grade credit rating. That is more concerning than political pillow fights. A country that does not have investment grade credit rating for Foreign or Local currency does not attract investment. Which means no way to get above subsistence economy. Most important job of PK government is to get out of this trap and become a creditworthy country so that investments can come.

 

[Wood]

I wonder if FATF has influence on the methodology used by these credit rating agencies to issue ratings. With Pakistan's elevation from Grey list (pending soon), this may improve the country's rating

 

[VkdIndian]

There is a third rating agency-FITCH.

This reminds me of communication company’s names - Motrolla, Siemens, Ericsson.

Just ask any Bengali friend to say these and one would know.

 

[Ssan]

Well most graders wouldn't hesitate to give extra 1-2 points to anyone who is at 49. If they actually give you 49 and let you fail, it means you are really shit, so again, a big difference between 51 and 49.,,

To be fair the top three are often very close to one another. If you include Feri though, you often see the case where Feri will rate something as junk and the other three will rate as investment grade. Go through link and you will see examples of that.

The top three are also very politicized.

 

[LakeHawk180]

I wonder if FATF has influence on the methodology used by these credit rating agencies to issue ratings. With Pakistan's elevation from Grey list (pending soon), this may improve the country's rating

Regulatory risk, financing risk etc are all part of every credible risk assessment exercise.

 

[HAIDER]

I wonder if FATF has influence on the methodology used by these credit rating agencies to issue ratings. With Pakistan's elevation from Grey list (pending soon), this may improve the country's rating

FATF is totally independent agency, targeting only terror funding and channels.

 

[Wood]

FATF is totally independent agency, targeting only terror funding and channels.

FATF grey list will stifle investment into the country. I just googled to find this :

Pakistan's inclusion on 'grey list' is credit negative for banks - Moody's

Pakistan's banking system faces a credit risk from the country's continued inclusion on an international "grey list" of nations falling short of global money laundering rules, rating agency Moody's said on Thursday.

www.reuters.com

“The announcement is credit negative for Pakistani banks because it raises questions about potential additional restrictions relating to banks’ foreign-currency clearing services, as well as their foreign operations,” Moody’s said, adding that increased compliance costs would also hamper banks’ profitability.

 

[epebble]

Regulatory risk, financing risk etc are all part of every credible risk assessment exercise.

In this downgrade, it looks like they were assessing impact of recent events like this:

Sorrow Of The Indus Delta And Its Displaced People​

Estimates suggest 90% of the once fertile and flourishing Indus Delta is no more. Local communities have experienced the devastating results over their lifetime​

Sorrow Of The Indus Delta And Its Displaced People

The people of the Indus Delta have lost everything just because of damming, diverting and barraging of the Indus River

www.thefridaytimes.com

With a third of fertile farmland underwater, there will be a lot of pressure on food imports. That along with increased Petroleum prices means there is a danger of balance of payment crisis. It will be a miracle if PK doesn't become Sri Lanka of 2023.

 

[WarKa DaNG]

Don;t worry people dollar dar has threatened the Moody and they are now shitting their pants