Karachi: VIS Credit Rating Company Limited has reaffirmed the entity ratings of Pakistan Currency Exchange Company (Private) Limited at 'A-/A2', indicating good credit quality and adequate protection factors for medium to long-term obligations. The short-term rating suggests a good likelihood of timely repayment, with stable outlook maintained.

According to VIS Credit Rating Company Limited, the reaffirmation reflects PCEC's position as a major player in the currency exchange market in Pakistan, supported by its extensive branch network across key cities such as Karachi, Lahore, Islamabad, Quetta, and Peshawar. The company's operations, licensed by the State Bank of Pakistan under the Foreign Exchange Regulations Act of 1947, face industry challenges including currency rate fluctuations and regulatory compliance demands. Despite these challenges, PCEC's market dominance provides a degree of stability.

The financial assessment highlights the impact of declining foreign exchange income on profitability, though cost management has helped maintain operating margins. Rising finance costs, however, have affected net income. The company's capitalization has improved due to a stronger equity base, although increased short-term debt for working capital remains a concern. Liquidity is stable, but the liquid asset position has weakened due to investments in office space, and coverage indicators have declined due to reduced funds flow from operations.

Future ratings will depend on PCEC's ability to sustain its market position amid growing competition and effectively manage currency exchange rate risks. Enhancements in liquidity and coverage metrics will be essential, with regulatory changes and economic conditions playing a significant role in future assessments.