In a positive turn for Pakistan’s economy, the country’s bonds in the international market have reached their most stable level in three years, reflecting increased investor confidence in its Eurobond performance.
According to reports, all concerns regarding Pakistan’s potential default in the global bond market have been alleviated, as the country’s bonds continue to demonstrate resilience and stability.
Market data indicates a notable decline in the risk premium on Pakistani bonds, which has dropped significantly from 61.4% to 7.79%. The risk associated with the $1.2 billion Eurobond set to mature in 2026 has fallen to 8.5%, while the $1.5 billion bond maturing in 2027 now holds a risk of just 9.1%. Similarly, the repayment risk for the $1 billion bond due in 2029 has declined from 28.8% to 9.4%.
As concerns over foreign exchange reserves subside, Pakistan is now better positioned to re-enter the global bond market with strengthened financial stability.
In January, Finance Minister Muhammad Aurangzeb announced plans to introduce a Panda Bond by June 2025, aiming to expand Pakistan’s presence in China’s capital markets. Speaking to an international news outlet, he revealed that Pakistan seeks to raise approximately $200 million from Chinese investors through this bond issuance.
The minister emphasized that this initiative aligns with a broader economic strategy focused on export-led growth and sustainable balance of payments. Additionally, he underscored the importance of the second phase of the China-Pakistan Economic Corridor (CPEC) in fostering long-term economic stability.
