August 30, 2022 (MLN): Pakistan’s international bond and Sukuk yields across seven different maturities declined in the range of 3bps to 19bps on Tuesday when compared to a day earlier owing to improved fundamentals driven by the International Monetary Fund (IMF)’s approval of seventh and eight tranche of $1.17 billion.
The yields of a 5-year bond maturing this December fell by 17bps to 22.8%.
To recall, on July 19, yields on bonds maturing in December this year peaked at 51.3% owing to the rising concerns over the deterioration in the country's external liquidity position and financing conditions since early 2022.
However, IMF’s executive board’s decision to release SDR 894 million i.e., about $1.1bn has improved the outlook of the country’s external account.
In order to support program implementation and meet the higher financing needs in FY23, as well as catalyze additional financing, the board’s decision allowed for an immediate disbursement of SDR 894mn, bringing total purchases for budget support under the arrangement to about $3.9bn, said a press release issued by the IMF.
This has also reduced pressure on the PKR today as it snapped its losing streak by recovering almost three rupees in the interbank market in early trade.
Interest rates for 5-year bonds maturing in April 2026 declined by 19bps DoD to 20.8% while for 10 years maturing in Sept 2025 recorded a drop of 17bps to 22.6% on August 30, 2022.
Furthermore, the yields for 7-year Pakistan Global Sukuk Programme Company Limited maturing in Jan 2029 weakened by 13bps DoD to 12.5%.
