LONDON: Pakistan’s Eurobonds fell following what traders said appeared to be the country’s third currency devaluation in seven months.
The 2027-maturing bond fell 0.75 cents to trade at 89.76 cents – the first time the bond had slipped below the 90 cent mark, Thomson Reuters data showed. A 2025 bond fell 0.61 cents as well, to its lowest level since February 2016.
Pakistan’s economy is forecast to expand by close to 6 percent this year which would be the fastest pace in more than a decade.
A widening current account deficit, however, has fuelled speculation it will need its second International Monetary Fund (IMF) bailout since 2013.
Five years ago, Pakistan had asked for a new $5.3 billion bailout loan programme from the International Monetary Fund.
As part of the loan agreement, the then Pakistani government had developed plans to improve tax collection and to eliminate tax loop holes and exemptions. It also had a programme to restructure and even privatise public sector enterprises, which would generate significant revenues.
This was Pakistan’s first fund programme, out of 11, to have reached completion in 2016 since it started receiving IMF bailouts in 1988