Wall Street banking giant Citi projects that Pakistan will secure a new IMF programme amounting to $7-8 billion by end-July, fostering optimism in the country’s financial markets. In light of this, Citi advises investors to consider long positions on Pakistan’s 2027 international bond.
Nikola Apostolov, representing Citi, highlighted the positive outlook for Pakistan’s Eurobonds, citing the potential for a larger and longer IMF Extended Fund Facility (EFF) programme alongside anticipated Saudi investments. This optimism follows discussions between Citi’s team and Pakistani policymakers, including Finance Minister Muhammad Aurangzeb.
An upcoming IMF mission to Pakistan aims to deliberate on the fiscal year 2025 budget, policy reforms, and potential initiatives under a new programme. IMF Resident Representative Ether Perez Ruiz emphasized the goal of fostering better governance and sustainable economic growth for all Pakistanis.
Meanwhile, Citi anticipates attractive opportunities for investors in Pakistan’s 2027 bond, viewing it as a promising asset with ample liquidity and significant upside potential. The bond, maturing in 2027, currently trades at 87.292 cents in the dollar, presenting an appealing proposition for market participants.
Notably, Pakistan’s shorter-dated bonds, maturing in 2025 and 2026, have experienced a notable rally since late last year, trading between 91-96 cents. This surge follows a period of distress in 2022 when Pakistan’s international bonds plummeted to as low as mid-20 cents in the dollar.
