New York September 23 2022: Yields of Pakistan bonds and Sukuks floating in the international market rise sharply during this month as rupee continue to lose value against dollar on dollar shortages due to flood devastation amid political uncertainty, according to data available at Reuters.
Yields of both Pakistan International Sukuk and Pakistan International Bond having maturity of 5th December 2022 and 15th April 2024 are above 60%. The former trading at Yield to maturity (YTM) of 104.7% and the later at YTM of 60.7%.
Earlier, the Financial Times said a United Nations development agency was urging the cash-strapped South Asian nation to restructure its debt.
Devastating floods engulfed large swathes of the country this month, affecting 33 million people, causing damage estimated at $30 billion, and killing more than 1,500, fanning fears that Pakistan will not meet its debts.
Pakistan Rupee depreciates 8.86% or 21.10 in last fifteen sessions due to currency shortages as more dollar required for import of vegetables to meet crop lost due to unprecedented floods witnessed by country this monsoon season. Pakistan currency hit low of 239.94 on 29th July 2022 on uncertainty of IMF program.
The Rupee is 23 paisa or 0.11 percent away from hitting record low of 239.94. According to Bloomberg, the currency is among the worst performers globally in September, having fallen more than 8%.
Pakistan Government International Bonds with maturity of 30th September 2025, 8th April 2026 and 5th December 2027 are trading at 39.2%, 34.2% and 27.9%.
However, possibility of relaxation under current program and assistance of USD 1.2 billion form World Bank for flood victims might change the sentiments in next few days.