Moody’s Upgrades Pakistan’s Credit Rating To B3 From Caa1, Outlook Stable

Moody's has increased Pakistan's credit rating to B3 from Caa1, with a stable outlook. The improvement covers both Pakistan's foreign currency and long-term local currency debt ratings, according to the agency's latest report. The stable outlook remains unchanged. The upgrade positions Pakistan at B3 on Moody's rating scale. Notably, this marks a significant improvement from the Caa1 rating that Moody's had assigned since its August 2025 upgrade.

At that time, the agency highlighted an improving external position and progress under the International Monetary Fund program. Pakistan's ratings from the three major international agencies are now all at B3, with Moody's, B with S&P Global Ratings, and B minus with Fitch Ratings. The S&P rating also carries a stable outlook, just like Fitch's.

This upgrade also signifies a substantial shift from Pakistan's situation a year ago, when Moody's only raised the country's rating to Caa1 from Caa2 and changed the outlook to stable from positive. The agency then pointed to improving foreign exchange reserves, IMF-supported reforms, and a strengthening external position, while warning of Pakistan's continued dependence on timely financing from official partners.