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Pakistan, Sri Lanka and Vietnam most at risk of a credit downgrade: report

Nov 10, 2008 (LBO) – Pakistan, Sri Lanka and Vietnam are most at risk of a credit downgrade in Asia by the rating agency Standard and Poor's (S&P), amid global economic turmoil, a media report said. The island has been hit by withdrawing foreign hot money brought into bridge fiscal deficits.

Okorotchenko was quote as saying that Sri Lanka's short-term commercial debt was a concern. The International Monetary Fund has also warned against short term foreign debt.

"Pakistan is the weakest, followed by Sri Lanka, then Vietnam," Elena Okorotchenko, head of Asian sovereign ratings at S&P, was quoted as saying by Bloomberg, a financial newswire.

"Pakistan faces severe pressure from the external side, the fiscal side, the monetary side, economic growth and politics.

"There are five angles in which we analyze a country's ratings and Pakistan is negative on all counts.''

S&P has downgraded Pakistan to CCC+. The country's foreign reserves plummeted as its central bank tried to defend a dollar peg over more than a year.

Vietnam also had currency troubles as it intervened in the market early in the year without raising interest rates.

Sri Lanka has been defending a dollar peg

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