Pakistan dollar bonds rally after $3b IMF bailout

ISLAMABAD: Pakistan’s sovereign dollar bonds gained by 1.7 cents after the International Monetary Fund (IMF) officially signed off a $3 billion bailout, Tradeweb data revealed on Thursday.

The 2024 and 2027 maturities saw the strongest rallies, with the latter rising by 1.75 cents by 0629 GMT.

The 2027 is at a 10-month high of just over 53 cents on the dollar, while the 2024 is at its highest in over a year trading just under 80 cents.

Pakistan also got $1 billion from the United Arab Emirates and $2 billion from Saudi Arabia earlier this week.

On June 29, the IMF and Pakistan reached a Standby Arrangement to ease the country’s financial crisis, as it has been at the risk of default because of a chronic foreign currency shortage.

“The Executive Board of the International Monetary Fund approved a 9-month stand-by arrangement for Pakistan for an amount of about $3 billion, or 111 per cent of quota, to support the authorities economic stabilisation programme,” the IMF stated.

The $3 billion loan to be spread over nine months was much higher than anticipated.

Earlier, Pakistan was awaiting the release of the remaining $2.5 billion from a $6.5 billion bailout package agreed in 2019, which expired on June 30 before its ninth review.