A report by Moody said on Thursday that Pakistan does not have enough foreign exchange reserves to pay its public and private external debt due over this year.
The Moody’s Investor report further said in its report that “Foreign exchange reserves are low, and gross borrowing requirements are large in Pakistan and Sri Lanka, threatening the ability of these governments to refinance debt and fund deficits affordably.”
The credit rating agency said the total public and private external debt due over the next year is larger than foreign exchange reserves.
Foreign exchange reserves are on lower side in Pakistan. The lower reserves threaten government to refinance debt, it noted.
Pakistan’s foreign reserves declined owing to persistent current account deficit. The reserves coverage of imports has also fallen, Moody’s further said.