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Pakistan’s dollar bonds have ticked higher after its finance minister announced that it has received $2bn in financial support from Saudi Arabia. This comes just a day before the IMF board is expected to approve a $3bn standby arrangement made via a staff-level agreement it reached with Pakistan two weeks ago. The funds from Saudi Arabia were pledged in April but experienced delays as it wanted confirmation of an IMF bailout before disbursing the funds. These funds will help to alleviate concerns over Pakistan’s foreign exchange reserves, which was previously barely enough to cover a month of imports. The announcement also comes a day after Fitch upgraded Pakistan’s sovereign rating to CCC from CCC-.
Pakistan’s bonds have demonstrated impressive rallies of between 20-40% since a month ago, with its shorter-dated bonds enjoying the biggest gains. In particular, its 8.25% 2024s have rallied by 37% over the past month and are currently trading at 79.3 cents on the dollar.
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