Global ratings agency Fitch cut Pakistan’s sovereign credit rating on Friday by a notch to ‘CCC+’ from ‘B-’, citing further deterioration in the country’s external liquidity and funding conditions and a drop in foreign exchange reserves.

Fitch typically does not assign outlooks to sovereigns with a rating of ‘CCC+’ or below.

Recent widespread floods in Pakistan have further weakened the country’s economy, already in turmoil with a rising current account deficit, inflation above 20% and a sharp depreciation of the rupee currency.

The agency said the floods, which have killed 1,700 and caused more than $30 billion damage to the economy, will undermine Pakistan’s efforts to rein in twin fiscal and current account deficits.

On the policy front, Fitch said it assumed that Pakistan will continue to receive disbursements under its IMF programme, but risks to this have risen.

The Asian Development Bank (ADB) has pledged up to $2.5 billion to Pakistan, of which it will get funds worth $1.5 billion by next week under its BRACE programme.