Islamabad June 7 2023: Pakistan's dollar bonds and stocks climbed on growing optimism the nation will succeed in restarting its $6.7 billion bailout program with the International Monetary Fund.
Bloomberg reported that bonds due April 2024 gained a seventh day, with the notes indicated 0.5 cents higher to about 58 cents on the dollar on Wednesday, the highest since February. The nation's benchmark KSE-100 Index also gained by 0.5% at 9:40 a.m. in Karachi, up for a fourth consecutive session, to the highest in one month.
The South Asian nation is making a final effort to revive its loan program before it expires at the end of June as it works to secure the remaining $2 billion in external funding gap out of a $6 billion target set by the IMF. The IMF loan is crucial in helping Pakistan avert a sovereign default, with billions of dollars of debt payments approaching.
"The IMF is more likely and an imminent default is now less likely," says Bilal Khan, head of international sales at Arif Habib Ltd. in Karachi.
The nation faces about $22 billion of external debt payments for fiscal year 2024, which begins in July, according to Columbia Threadneedle Investments. That level is about five times its reserves.