Moody's' gives serious warning about Pak's pauperism - Daily Current fairs

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Saturday, 14 September 2019

Moody's' gives serious warning about Pak's pauperism

Moody's' gives serious warning about Pak's pauperism

The world's biggest credit rating agency Moody's has warned about the economic situation of Pakistan standing on the verge of terrorism and poverty. Moody's has placed Pakistan among the countries that have had the biggest impact of the US-China trade war. This economic condition of Pakistan has happened because its dependence on foreign currency and external debt payments have weakened Pakistan's condition.

Moody's stated, 'The greatest risk is on the B-rated countries in Asia-Pacific, Middle East, and North Africa and Latin America. Due to weak credit carrying capacity, dependence on foreign exchange, the economy of these countries are witnessing a rapid decline. The agency has said that Pakistan, as well as some other countries, have been made aware of the serious economic conditions. The agency further warned that due to taking loans, Pakistan, Sri Lanka, Egypt, Angola, and Ghana will see the biggest fall in the coming times.

According to the media report, Pakistan's debt has increased further. Pakistan has been given $ 6 billion in financial aid with a 39-month IMF agreement to help it recover its economic condition. Pakistan's fiscal deficit may also increase. As a result, interest rates in Pakistan will remain very high. The Central Bank of Pakistan has raised interest rates by 750 basis points in the last two years. With the continuous rollover of short-term treasury bills, these high domestic interest rates have sharply increased the government's borrowing costs.

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