Pakistan says strongly contests ratings downgrade by Moody’s

KARACHI, Pakistan (Reuters) -Pakistan said on Friday it “strongly contests” a ratings downgrade by agency Moody’s (NYSE:), adding that it had adequate liquidity and financing arrangements to meet its external liabilities despite being hit by catastrophic floods.

Moody’s cut Pakistan’s sovereign credit rating on Thursday by one notch to Caa1 from B3, citing increased government liquidity and external vulnerability risks in the wake of devastating floods that hit the country in August.

“The rating action by Moody’s was carried out unilaterally without prior consultations and meetings with our teams from the Ministry of Finance and State Bank of Pakistan,” Pakistan’s finance ministry said in a statement posted on Twitter.

The statement also said that after Moody’s had intimated that action was in the offing, the finance ministry had held two meetings with the agency’s team to share data and information that it described as “clearly contradicting” the downgrade.

The ministry said factoring in the impact of the floods at this point was “premature” given that loss assessments were incomplete, and added that all financing requirements would be met.

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