WASHINGTON, March 20: Recent positive economic and political developments in Pakistan encouraged the US Export-Import Bank to upgrade the country's risk rating, said a statement issued in Washington on Saturday.

The expanded coverage includes short, medium- and long-term financing and is the "result of improving economic and political fundamentals in Pakistan," the bank said. "Such developments led to a likewise improvement in Pakistan's risk profile." The Exim Bank is an independent federal agency of the US government and authorizes financing to support US investments abroad. Last year, the bank authorized $14.3 billion to support US exports worldwide.

The bank has now agreed to offer expanded financing opportunities for US exports to the public sector in Pakistan as well.

"The upgrade in Pakistan's risk rating is confirmation of positive economic developments that have occurred in Pakistan," said Exim Bank Chairman Philip Merrill. "This includes a reduction in external debt, and growth in exports and foreign exchange reserves."

Such improvements, the chairman said, "open the way for expanded trade between our two countries. Exim Bank is glad to consider sovereign financing transactions in support of US exports to Pakistan." Exim Bank financing now will be available to support Pakistan's purchases of US equipment and services. But the Pakistan government would have to guarantee the repayment of the financing.

This is a marked improvement in the bank's previous policies towards Pakistan where it has not operated under its routine programmes since 1998, when nuclear tests led to the imposing of severe US economic sanctions. Despite these restrictions, the bank said, it has approved a limited number of transactions that were specially structured to ensure reasonable assurance of repayment. This included a long-term loan guarantee to support the export of three Boeing 777 aircraft to Pakistan International Airlines.

The Exim Bank this year marks its 70th year of helping finance the sale of US exports, primarily to emerging markets throughout the world, by providing loan guarantees, export credit insurance, and direct loans.