Pakistani Bonds Surge Following Credit Rating Upgrade

Long-term Pakistani dollar bonds continued their upward trajectory for a second consecutive day, reaching new three-year peaks on Friday. This surge follows S&P Global’s recent upgrade of Pakistan’s sovereign credit rating.

The ratings agency increased the rating by one notch to ‘B-‘, attributing the decision to the International Monetary Fund’s support in bolstering Pakistan’s strained financial situation.

KIBOR Trends

The Karachi Interbank Offered Rate (KIBOR) experienced declines across short-term maturities, fueled by anticipation of policy rate reductions.

The bond maturities of 2031 and 2036 both saw gains of approximately 1.6 cents on Friday, with bids at 93.85 cents and 87 cents, respectively. These gains propelled the bonds to their highest values since early 2022.