Moody’s Stable Outlook FX Reserves $17 Billion End-July 2026 Up From $14 Billion 2025 Interest Payments Fall To 35% Of Revenue From 49% External Vulnerability Indicator 145% Down From 230% Fitch B- Assigned To Pakistan’s Proposed Dollar Bonds And MTN Programme S&P Also Upgraded Pakistan To B Earlier In 2026 All Three Major Agencies Now Rate Pakistan In Single-B Territory
According to Dawn and Fitch Ratings, Pakistan received back-to-back positive signals from two of the world’s three major credit rating agencies in the space of days, Moody’s upgrading its sovereign rating to B3 from Caa1 with a stable outlook on August 24, and Fitch assigning a B- rating to Pakistan’s proposed US dollar bonds and Medium-Term Note programme on September 1, bringing all three major agencies into single-B territory for Pakistan for the first time in years.
Moody’s cited expectations of improved governance enabling the government to sustain external position gains and strengthen fiscal metrics. Foreign exchange reserves rose to approximately $17 billion at end-July 2026 from $14 billion in July 2025, covering nearly three months of imports. Pakistan’s External Vulnerability Indicator improved sharply to approximately 145 per cent in 2026 from 230 per cent in 2025. Interest payments fell from 49 per cent of government revenue in fiscal 2025 to approximately 35 per cent in fiscal 2026. Pakistan also issued a $750 million Eurobond in April 2026 and a CNY 1.75 billion debut Panda bond in May 2026.
The Fitch B- rating for the proposed USD bonds is consistent with Pakistan’s existing B- sovereign rating affirmed by Fitch, which reflects continued adherence to the IMF programme and improving macroeconomic fundamentals. Moody’s forecast FX reserves rising to $19-20 billion by end-FY27 and $20-21 billion by FY28.
Both agencies noted lingering vulnerabilities: large external financing needs of $21 billion in FY27 and $30 billion in FY28, structural revenue constraints and risks from geopolitical tensions but judged these manageable given continued IMF programme adherence.
Three agencies. All saying the same thing in the same week. That is a signal. Check out our previous coverage of Pakistan’s economy on The Trusted Times.
