Moody’s Investors Service on Thursday changed its outlook on Pakistan’s banking sector from “negative” to “stable” citing its solid profitability, stable funding and liquidity, which it said “provide an adequate buffer’ to withstand the country’s macroeconomic challenges and political turmoil.
The international rating agency — one of the top three global rating firms — said that the economic and fiscal pressures were easing for the country, as it forecasted that the economy would return to a 2 per cent growth rate in 2024 after subdued activity in 2023. The report also said it expected inflation to fall from 29pc to 23pc.
“Pakistani banks remain highly exposed to the government via large holdings of government securities that amount to around half of total banking assets, which links their credit strength to that of the sovereign,” the global rating agency said.
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