The battered Pakistani economy is now all set to be subjected with substantial credit risks reaching critically low levels in terms of its foreign exchange reserves. The New York-based global ratings agency Fitch has announced that Pakistan is staring at a default and warned that this is a real possibility.
Fitch has downgraded Pakistan's foreign currency issuer default rating (IDR) to a level of 'CCC-' from 'CCC+', pointing out the worsening conditions in liquidity and other policy risks.
The downgrade indicates a sharp deterioration in the country's external liquidity and funding conditions, which comes amid the steady decline of foreign exchange (FX) reserves. Despite accepting all of the IMF's conditions, there is still no hint of substantial funds coming in to bail out the country's economy.
