Pakistan smells rat in ratings downgrade by S&P: The News

Thursday, November 20, 2008
By Khalid Mustafa

ISLAMABAD: The downgrading of Pakistan’s rating by Standard & Poor’s on October 6 by two notches and then on November 14 by one notch seems to be the part of international politics, as it has increased the vulnerability of Pakistan many times.Owing to this very factor, banks have started showing hesitation in opening of L/Cs of the importers, a senior official in the Finance Ministry.

To substantiate Pakistan economic managers’ view, JP Morgan in its latest comment doubted the downgrading of Pakistan by S&P saying: “S&P decision to downgrade Pakistan to CCC last week, based on the ‘ongoing delay by Pakistan in securing external assistance essential for the immediate stabilization of its balance of payments position,’ was curious.”Finance ministry official said that the authorities concerned were shocked over the apparently politically dominated decision of S&P to further downgrade Pakistan rating on November 14 as during the period between October 6 and November 14, the government of the day had to set its direction to move IMF to bailout its economy.

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