Flood-ravaged Pakistan contests ratings downgrade by Moody’s

By MUNIR AHMED
Associated Press

ISLAMABAD (AP) — Pakistan is contesting a downgrade of its rating by Moody’s Investors Service, insisting it has adequate reserves and financing to repay foreign debt even after the worst flooding in its history. The angry reaction from Pakistan on Friday comes a day after Moody’s revised Pakistan’s sovereign credit rating by one notch to Caa1 from B3. Such downgrades often shake the confidence of foreign investors because the action is seen as a warning that the country is more likely to default on its debts. The Finance Ministry said it “strongly contested” the downgrade, as it was carried out by Moody’s “unilaterally.” Pakistan wants Moody’s to reverse its decision.