New York September 5 2022: Pakistan’s dollar bonds slid to the lowest in more than a month as the economy reels from catastrophic floods, putting pressure on the government’s fiscal health, reported by Bloomberg.
Bonds due in 2031 were quoted 0.6 cents lower at 50.82 cents on the dollar on Tuesday, the lowest since Aug. 2. The notes surged to 58 cents on the dollar last week after the nation secured a $1.1 billion loan from the International Monetary Fund, helping ease the risk of a default. Bonds due 2024 fell to 66.6 cents on the dollar, the lowest since Aug. 5.
“Pakistan bonds are weighed down by the ongoing catastrophic floods in the country,” said Eng Tat Low, an emerging-market sovereign analyst at Columbia Threadneedle in Singapore. “Their fiscal health will take a hit from it.”
The worst flooding in Pakistan’s history has killed more than 1,300 people and estimated to cause $10 billion of damages to the economy. The government on Monday cut its growth forecast for this fiscal year to 2.3% from 5% in June, saying the floods which have inundated a third of the country have intensified the nation’s economic crisis.
