Moody's has upgraded Pakistan's credit rating to 'Caa1' from 'Caa2', citing an improving external financial position and progress in implementing reforms under the IMF Extended Fund Facility program. The upgrade reflects enhanced debt affordability, though Moody's also notes weak governance and political uncertainty. Finance Minister Mohammed Aurangzeb expressed optimism about further rating improvements from Fitch and S&P and indicated there is potential for a reduction in Pakistan's key policy rate from 11 percent, with the next policy rate announcement scheduled for September 15. The central bank maintained its key interest rate unchanged at 11 percent in July despite rising inflation to 4.1 percent year-on-year, which was attributed to higher energy prices.

Moody's Ratings has upgraded Pakistan's long-term sovereign credit rating to Caa1 from Caa2, citing improved external liquidity and a stronger short-term repayment outlook due to continued engagement with the International Monetary Fund (IMF) and bilateral lenders. The stable outlook reflects reduced default risk, driven by rising foreign exchange reserves from IMF disbursements and debt rollovers, and improved import coverage now exceeding two months. Despite this upgrade, Pakistan remains in the highly speculative category, with elevated borrowing costs and limited investor participation. The move is seen as symbolic, signaling a step away from imminent default but not a return to market normalcy. Market reaction was modest, with the rupee strengthening slightly and Pakistan’s 2026 Eurobond yield falling by 25 basis points. Analysts note the upgrade may help attract portfolio inflows and ease bilateral negotiations, but it does not restore access to affordable international debt markets. Moody's last upgraded Pakistan in August 2024 from Caa3 to Caa2 after the IMF approved a new loan programme; today's upgrade builds on that momentum, with economists urging sustained reform discipline through 2026 to preserve stability.

Moody's Investors Service has upgraded Pakistan's local and foreign currency issuer and senior unsecured debt ratings from Caa2 to Caa1, and raised the senior unsecured Medium Term Note (MTN) program rating from (P)Caa2 to (P)Caa1. The outlook for Pakistan's credit rating has been revised to stable from positive, reflecting improvements in the country's external financial position due to progress in reforms under the IMF's Extended Fund Facility (EFF) program. The upgrade also applies to The Pakistan Global Sukuk Programme Co Ltd, which is considered a direct government obligation. Moody's notes that Pakistan's foreign exchange reserves are growing, fiscal position is strengthening through better tax collection and an expanding tax base, and the government's revenue as a share of GDP is projected to reach 16% in FY2025. However, high political uncertainty, weak governance, rising defense spending, and significant interest payments remain key risks. The country secured a $1.4 billion 28-month IMF arrangement and a potential $20 billion ten-year partnership with the World Bank, though annual external financing needs are estimated at $24–25 billion for FY2026 and FY2027.

Global credit rating agency Moody's has upgraded Pakistan's credit rating from Caa2 to Caa1, reflecting improvements in its external financial position due to economic reforms under the IMF's Extended Fund Facility (EFF) programme. The outlook has been revised from positive to stable, indicating confidence in near-term stability despite ongoing risks related to weak governance and political uncertainty. The Caa1 rating still classifies Pakistan as high-risk but represents progress toward regaining access to global bond markets. Pakistan has not issued international bonds since July 2021 due to poor ratings and economic stress. The previous upgrade occurred in August 2024, when Pakistan moved from Caa3 to Caa2.

Moody’s Analytics participated in the Oppenheimer 28th Annual Technology, Internet & Communications Conference on August 11, 2025, where it discussed its strategic integration of artificial intelligence into 40% of its products to enhance customer engagement and operational efficiency. The company highlighted growth in its KYC business, with a 15% increase in annual recurring revenue (ARR) during Q2. Moody’s is investing in strategic partnerships to strengthen its ESG capabilities and expand its KYC offerings, while also leveraging AI to improve productivity and manage expenses, particularly in the private credit space.