S&P ups Pakistan view to positive

Standard & Poor's Ratings Services affirmed its B+ foreign-currency and BB local-currency long-term ratings and its B short-term sovereign ratings on the Islamic Republic of Pakistan, and revised the outlook on the local-currency rating to positive from stable while affirming the positive outlook on the foreign-currency rating.

The outlook revision reflects the government's renewed effort to finance more of its fiscal gaps through local currency bond issues after a period of suspension, the agency said. The resumption of treasury bond auctions will benefit domestic capital markets, extend the average maturity of the government's rupee-denominated debt and will go some way toward alleviating the need for central bank deficit financing, S&P said.

The ratings take into account Pakistan's favorable macroeconomic policy environment and improved real GDP growth prospects while considering the country's high public and external leverage, security risks and fiscal inflexibility, the agency added.

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