ISLAMABAD, Feb 15: Moody’s Investor Services has upgraded Pakistan’s foreign currency debt and bank deposit ratings from Caal to B3 as a result of improved economic management.

Accordingly, the rating on the government’s outstanding Eurobond has been upgraded to B3, and the foreign currency deposit ratings of the four banks currently rated by Moody’s - Habib Bank, National Bank, United Bank and Muslim Commercial Bank - have been raised to B3 in line with the hike in the bank deposit ceilings.

The rating on rupee-denominated debt have also been raised from Caa1 to B3. The agency said that the upgrades mainly reflected the country’s improved external liquidity situation, particularly the long-term debt relief provided by the latest Paris Club agreement in December last. The ratings outlook remain stable.

Moody’s observes the current geopolitical climate benefits Pakistan financially in spite of recent heightened tension with India.