Moody's cuts Pakistan to B3

Moody's Investors Service said it lowered the Pakistani government's bond ratings from B2 to B3 and kept the ratings on review for downgrade.

The outlook is negative.

The downgrade was prompted by the continuing erosion of the country's external liquidity position, which has remained inadequately addressed by policy adjustments and has suffered from delays in assistance from key bilateral and multilateral creditors, Moody's said.

The failure to obtain timely assistance from Saudi Arabia, China and the U.S., along with delays in disbursements from the World Bank have eroded investor confidence and resulted in a substantial drawdown of Pakistan's foreign-currency reserves, the agency said.

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