External positions have strengthened for most rated frontier sovereigns in Asia, including Pakistan, over the first half of 2021, reducing downside risks to ratings. This was stated by Fitch Ratings on Monday in a research report titled “External Liquidity Strains Ease in Some APAC Frontier Economies.” Where reserves have risen, the increase should provide a cushion against potential difficulties in accessing external finance and associated external liquidity stress, and reduce the likelihood of negative rating action, all else being equal, said Fitch. Bilateral and multilateral financing has helped support Pakistan’s external positions. Pakistan has benefited from the disbursement of the International Monetary Fund (IMF) resources under its Extended Fund Facility with the completion of the “combined second through fifth reviews” last March, and more recently from Saudi Arabia’s agreement in June to an oil assistance package for Pakistan that could be worth up to $1.5 billion. According to the report, the expected new allocation of special drawing rights (SDR) by the International Monetary Fund (IMF), which is likely to be approved next August, can bolster Pakistan’s reserves by $2.8 billion.