Pakistan’s Bonds Decline Amid Rising Tensions

Dollar-denominated government bonds from Pakistan experienced a significant drop on Thursday, according to Tradeweb data. The decline, exceeding 4 cents, occurred amidst escalating tensions with neighboring India.

Bond Performance

The bond maturing in 2036 saw the most substantial decrease, falling by over 4 cents. Its bid price was recorded at 74 cents on the dollar.

Background of Tensions

The tensions follow an attack on Tuesday in Kashmir, where gunmen killed 26 individuals. This event marks the most severe assault on civilians in the region in almost two decades.

Accusations and Treaty Suspension

Indian police stated on Thursday that two of the three suspected militants involved in the attack were Pakistani nationals. Furthermore, India suspended the Indus Waters Treaty, a move Pakistan has criticized as an act of “water warfare.”