Pakistan dollar bonds slump after Dar vows to bring down interest rates

Published September 28, 2022
<p>This file photo shows foreign currency dealer counts US dollars at a shop in Karachi. — AFP/File</p>

This file photo shows foreign currency dealer counts US dollars at a shop in Karachi. — AFP/File

The country’s sovereign dollar-denominated bonds fell as much as 8 cents to hit fresh record lows after new finance minister Ishaq Dar on Wednesday vowed to bring down interest rates and fight inflation.

Shorter-dated issues suffered the biggest decline with the 2024 bond being bid at 40.2 cents on the dollar, according to Tradeweb data.

Bonds due in 2025 and 2027 fell just over 4 cents while longer-dated maturities received bids at just over 36.6 cents in the dollar.

Inflation in Pakistan is exceeding 27 per cent.

Dar also called the rupee currency undervalued and promised a strong response to resolve the country’s worst economic crisis.

Discussing the future roadmap, the senator said he would try to stabilise the currency before moving on to other targets.

“Our currency does not deserve to be there where it currently is. I believe some speculators who had been playing the game have now stopped. Before I landed here, they had started going in a good direction,” he added. “Our second priority is to bring inflation and interest rates down.”

To another question, the senator said his predecessor Miftah Ismail did everything he could to fix the economy.

“We will build it more and this is a consistent effort,” he added.

Long-term worries about Pakistan’s finances have been compounded over the last month by devastating Monsoon floods.

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Worsening hunger
Updated 08 Dec, 2022

Worsening hunger

THAT the dollar liquidity crunch has started hurting the import of essential items such as vegetables and raw...
Bannu beheading
Updated 08 Dec, 2022

Bannu beheading

The state must take up the cudgels and neutralise barbarism before it spreads.
Smog misery
08 Dec, 2022

Smog misery

IF 2022 has taught us anything, it is that generations of reckless disregard for Mother Nature has accrued very ...
Disquiet on the western front
Updated 07 Dec, 2022

Disquiet on the western front

IT is very difficult for Pakistan to be delinked from Afghanistan, because of reasons of geography and history.
Fuel from Russia
07 Dec, 2022

Fuel from Russia

THE apparent headway made with Russia for the purchase of its crude oil, petrol and diesel at discounted prices is a...
More women SHOs
07 Dec, 2022

More women SHOs

IT is encouraging to see more employment avenues opening up for women in Pakistan, with an increasing number of...