Fitch downgrades Pakistan's rating, projects GDP growth fall for FY19

Haider Ali 09:21 PM | 14 Dec, 2018
Fitch downgrades Pakistan's rating, projects GDP growth fall for FY19
NEW YORK - Global credit rating agency, Fitch downgraded Pakistan’s long-term foreign-currency issuer default rating (IDR) to B- from B and maintained the outlook as stable.

According to the rating agency, the Friday downgrade was reflective of a heightened external financing risk from low reserves and elevated external debt repayment.

The agency projected Gross Domestic Product (GDP) growth to fall to 4.2% in fiscal year 19, from a 13-year high of 5.8% in the previous year, as monetary and fiscal tightening measures begin to weigh on activity.

"The continuing deterioration in the fiscal position with a rising debt to GDP ratio also contributed to the downgrade to B- from B previously," stated the agency.

Fitch stated that the successful conclusion of ongoing negotiation on IMF support could help stabilize external finances, however, warned that the programme would then face significant implementation risk.

"Successful negotiations with the IMF could help attract more stable and sustained financing by opening up budget support from the World Bank (WB) and the Asian Development Bank (ADB)," stated the agency.

Fitch added that the IMF bailout could assist in improving access to bilateral lending and global capital markets.

The agency stated that the foreign currency reserves continued their decline, touching $7.3 billion as of December 6th, 2018, equivalent to 1.5 months of imports, despite major stabilization efforts by the central bank and new government.

The rating agency projected high gross financing needs, with an expected narrowing of the current account deficit which will be counterbalanced by higher external debt service payments compared to last year.

Fitch highlighted sovereign-debt service obligations over the next three years stood at $7 to $9 billion per year, which includes a $1 billion Eurobond repayment due to in April 2019.

The agency said financial commitments given to Pakistan by Saudi Arabia, China and the United Arab Emirates have helped the economy plug its near-term financing gap, however, it also highlighted that Pakistan’s tensions with neighbouring countries pose a geopolitical risk.

Haider Ali

The writer is a civil servant.


KARACHI - Following are the foreign currency exchange rates for US Dollar, Saudi Riyal, UK Pound Sterling, U.A.E. Dirham, European Euro, and other foreign currencies in Pakistan open market on February 7, 2022 (Tuesday).

Source: Forex Association of Pakistan. (last update 09:00 AM)

Currency Symbol Buying Selling
US Dollar ‎USD 279 282
Euro EUR 296.67 297.26
UK Pound Sterling GBP 331.71 332.41
U.A.E Dirham AED 74.8 75.1
Saudi Riyal SAR 73.21 73.51
Australian Dollar AUD 190.31 192.72
Bahrain Dinar BHD 732.23 740.23
Canadian Dollar CAD 205.22 207.42
China Yuan CNY 40.72 41.12
Danish Krone DKK 39.92 40.32
Hong Kong Dollar HKD 35.08 35.43
Indian Rupee INR 3.35 3.46
Japanese Yen JPY 2.5 2.54
Kuwaiti Dinar KWD 900.32 909.32
Malaysian Ringgit MYR 64.65 65.25
New Zealand Dollar NZD 174.19 176.19
Norwegians Krone NOK 27.12 27.42
Omani Riyal OMR 715.11 723.11
Qatari Riyal ‎QAR 75.64 76.34
Singapore Dollar SGD 208.03 210.03
Swedish Korona SEK 26.1 26.4
Swiss Franc CHF 297.31 299.81
Thai Bhat THB 8.25 8.4

KARACHI – The gold price in Pakistan dropped by Rs4,300 per tola to reach Rs200,000 on Tuesday as it lost ground on second consecutive day after witnessing mostly bullish trend last week.

As per the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of 10 grams of 24 carats gold decreased by Rs3,686 to settle at Rs171,468.

On Monday, the gold price witnessed a drop of Rs200 per tola to close at Rs204,300.

In the international market, the commodity dropped by $1 to reach $1,869 per ounce.

Meanwhile, silver prices in the domestic market slumped by Rs20 per tola and Rs17.14 per 10 grams to reach at Rs2,230 and Rs1,911, respectively.


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