Fitch, Moody's expect Pakistan to get $1.2 billion from IMF

Fitch Ratings downgraded the outlook on Pakistan's credit rating to negative last week.

ISLAMABAD (Dunya News) - Moody’s Investors Service and Fitch Ratings said they expect Pakistan to secure the $1.2 billion bailout from the International Monetary Fund (IMF), which may help ease pressure on the country’s currency and forex reserves.

“We assume IMF board approval of Pakistan’s new staff-level agreement” with the lender, said Krisjanis Krustins, a Hong Kong-based director at Fitch told Bloomberg.

“This will unlock significant additional financing from the IMF and other multilateral and bilateral sources and may well provide a significant confidence boost to the markets.”

Moody’s expects IMF to disburse the funds in the third quarter, said Grace Lim, a sovereign analyst with the ratings company in Singapore. Still, the risk that Pakistan may not complete its bailout program with the IMF is on the downside as the government may find it difficult to adopt measures to raise revenue, she said.

“Pakistan’s ability to complete the current program and maintain a credible policy path that supports further financing remains highly uncertain, while elevated inflation and a higher cost of living are adding to social and political risks,” Lim said.

Fitch Ratings downgraded the outlook on Pakistan’s credit rating to negative last week, while Moody’s also lowered its outlook in June.