Pakistan has received a major boost to its international credit standing after Moody’s Ratings upgraded its sovereign rating.
The agency raised Pakistan’s long-term foreign and local currency debt ratings by two notches. The rating moved from Caa1 to B3, while the outlook remained stable.
The upgrade signals an improvement in Pakistan’s creditworthiness. It also reflects progress in several areas linked to the country’s external finances and economic reforms.
Pakistan’s Credit Rating Improves to B3
Moody’s latest decision covers Pakistan’s foreign currency issuer rating and long-term local currency debt rating.
The agency retained the stable outlook attached to the previous rating. Therefore, the latest assessment indicates that Moody’s sees the current rating outlook as balanced.
The move also marks a notable change from Pakistan’s position over the past year. Moody’s had maintained the country’s rating at Caa1 since August 2025.
At that time, the agency highlighted improvements in Pakistan’s external position. It also pointed to progress under the International Monetary Fund programme.
Now, the two-notch upgrade places Pakistan at B3 on Moody’s rating scale.
IMF Programme and External Position Remain Important
Pakistan’s improved credit rating follows progress in areas that have remained important for its economic outlook.
Moody’s had previously highlighted stronger foreign exchange reserves and an improving external position. Meanwhile, reforms supported by the IMF also played a role in its earlier assessment.
The latest upgrade represents further improvement in the agency’s assessment of Pakistan’s credit position.
However, the stable outlook suggests that the upgrade does not remove the economic challenges facing the country. Pakistan still depends on timely financing from official partners to meet its external needs.
Pakistan’s Rating Compared With Other Agencies
The latest Moody’s decision also changes the comparison between Pakistan’s ratings from the three major international agencies.
Pakistan now holds a B3 rating from Moody’s. Meanwhile, S&P Global Ratings assigns Pakistan a B rating, while Fitch Ratings gives it a B- rating.
Both S&P and Fitch currently have stable outlooks for Pakistan. The latest Moody’s upgrade therefore adds to a broader improvement in Pakistan’s sovereign credit assessments.
A Significant Shift From Last Year
The latest decision marks a stronger upgrade than Moody’s previous rating action. In August 2025, Moody’s raised Pakistan’s rating by one notch. The rating moved from Caa2 to Caa1, while the outlook changed from positive to stable.
At that time, Moody’s cited stronger foreign exchange reserves and an improving external position.
The agency also recognised progress under IMF-supported reforms. However, it warned that Pakistan remained dependent on timely financing from official partners.
The move to B3 now represents another step upward in Pakistan’s sovereign credit rating. For the country, the decision provides a stronger assessment of its creditworthiness while maintaining a stable outlook.
