KARACHI: Pakistan's credit rating was cut by Standard & Poor's, which cited doubts about the country's ability to meet $3 billion in debt-servicing costs in the coming year.

The nation's long-term foreign currency rating was cut two levels to CCC+ from B, with a negative outlook, the U.S. rating company said in a report today. The rating may be lowered further if the government fails to stop the growing external imbalances, the report said.

“The downgrade comes in the wake of continued steep erosion of Pakistan's external liquidity position, the extent and pace of which casts rising doubts'' about the country's ability to meet about $3 billion of external debt servicing commitments, the report said.

Pakistan's President Asif Ali Zardari is seeking $100 billion to overcome the nation's economic crisis, the Wall Street Journal reported last week. The funds will help stop the outflow of capital from the country each time there is a bomb blast and it will build business confidence, Zardari said, according to the report.

The negative outlook reflects our expectation that multilateral and bilateral aid, including deferred oil payment schemes, may not be timely enough, or sufficient in magnitude to stem the loss of external liquidity,'' S&P said today.