Moody's changes Pakistan's outlook from negative to stable

ISLAMABAD, Feb. 28 (Xinhua) -- Moody's Investors Service has changed Pakistan's outlook from negative to stable while downgrading its local and foreign currency issuer and senior unsecured debt ratings from "Caa1" to "Caa3".

The U.S.-based agency released its ratings on its website Tuesday.

The decision to downgrade the ratings is driven by Moody's assessment that Pakistan's increasingly fragile liquidity and external position significantly raises default risks to a level consistent with a "Caa3" rating.

"In particular, the country's foreign exchange reserves have fallen to extremely low levels, far lower than necessary to cover its imports needs and external debt obligations over the immediate and medium term," the Moody's said in its ratings.

The stable outlook reflects Moody's assessment that the pressures Pakistan faces are consistent with a "Caa3" rating level, with broadly balanced risks, according to the Moody's.