Moody's has upgraded Pakistan's sovereign credit rating two notches to B3 from Caa1, maintaining a stable outlook and pointing to improvements in governance, a steadier fiscal position, and a buildup in foreign exchange reserves, which reached approximately $17 billion by end-July 2026. The ratings agency credited Pakistan's continued adherence to an IMF-supported reform programme, along with renewed access to international capital markets — including a $750 million Eurobond and a debut Chinese panda bond earlier this year — as key drivers of the improved credit profile. Moody's cautioned, however, that Pakistan's external position remains structurally fragile, with large financing requirements ahead and a still-narrow revenue base, risks it said were already embedded in the B3 rating.