New Delhi, May 5 -- A persistent increase in tensions between India and Pakistan is expected to impair Pakistan's access to external financing and pressure its foreign-exchange reserves, according to Moody's.

Pakistan's foreign exchange reserves remain well below what is required to meet its external debt payment needs for the next few years, the global rating agency noted in a report on Monday.

In India, the macroeconomic conditions are stable, bolstered by moderating but still high levels of growth and strong public investment and healthy private consumption, Moody's said in the report.

In a scenario of sustained escalation in localized tensions between the countries, Moody's does not expect major disruptions to India's economic acti...