Pakistan bonds stability boosts investor confidence and the country is preparing to re-enter the global bond market.
Pakistan’s economy has seen a positive shift as the country’s bonds in the international market have stabilized at a three-year high, reflecting increased investor confidence in its Eurobond performance.
Sources indicate that all default risks linked to Pakistan in the global bond market have been eliminated, with the country’s bonds maintaining steady performance.
Recent data shows a sharp decline in the risk premium on Pakistani bonds, dropping from 61.4% to 7.79%. The risk associated with the $1.2 billion Eurobond maturing in 2026 has decreased to 8.5%, while the $1.5 billion bond due in 2027 now carries a risk of just 9.1%. Likewise, the repayment risk for the $1 billion bond set to mature in 2029 has fallen significantly from 28.8% to 9.4%.
As concerns over foreign exchange reserves subside, Pakistan is now in a better position to re-enter the global bond market.
In January, Finance Minister Muhammad Aurangzeb revealed plans to issue a Panda Bond by June 2025 to expand Pakistan’s footprint in China’s capital markets. In an interview with an international news outlet, he shared that the country aims to secure around $200 million from Chinese investors through this bond issuance.
The minister emphasized that this initiative aligns with a broader economic strategy focused on export-driven growth and long-term balance of payments sustainability. He also underscored the crucial role of the second phase of the China-Pakistan Economic Corridor (CPEC) in stabilizing Pakistan’s economy.
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