KARACHI – Pakistan’s sovereign international dollar bonds will face the heat amid uncertainty as the current bailout program of crisis hit country with International Monetary Fund (IMF) ends a month after elections.
In a report, Bloomberg said Pakistani bonds – which performed well in 2023 – met uncertainty as the money market acts in a doddering fashion about the upcoming government that will strike a funding deal with the US-based lender to pass on the harsh economic challenges.
Impressively, bonds saw the biggest gains after IMF deal and budget approval. Investors minted good returns last year but elections and IMF uncertainty put these sovereign dollar-denominated bonds in dire straits for now.
Experts said Kakar-led government did well with financial matters but investors are now looking for an elected government. It was emphasized that the track record of previous elected governments with IMF programs is not something steady.
Market insiders told financial publications that investors hold their moves until Asian nation strike an improved deal with the IMF before the upcoming budget.
As buyers face uncertainty, there is still upside to the potential of government transition followed by new IMF deal.
International Monetary Fund revised Pakistan’s foreign loan requirements to $25 billion for the current fiscal year, reducing it by $3.4 billion.
