Pakistan Bonds Plunge 13 Cents Amid Trump Tariff Turmoil

Pakistan bonds plunge amid US tariffs and global selloff, marking biggest drop since early 2022 market turmoil. [Image via The Express Tribune]

Pakistan bonds fell more than 13 cents in the frontier market on Monday, as US President Donald Trump showed no signs of backing away from sweeping tariffs.

It was the single biggest decline for Pakistan bonds across many maturities since Russia’s full-scale invasion of Ukraine shook markets in early 2022.

Hard-currency debt issued by smaller, riskier, emerging markets suffered a sharp selloff on Monday, with yields across many of the bonds soaring into double digits.

The turmoil could exacerbate existing funding challenges in countries such as Angola, Gabon and Senegal.

“The macro volatility hit EM credit hard this week, with a clear risk-off tone meaning HY underperformance, wider spread sand lack of liquidity,” said James Wilson at ING.

Also See: Pakistan, IMF Reach Staff-Level Agreement on 1st Review Of Loan Programme, New $1.3 Billion Climate Fund

Longer-dated bonds issued by so-called frontier market governments such as Pakistan and Sri Lanka, both textile exporters slammed by the U.S. tariffs, were down more than 6 cents by 1500 GMT, Tradeweb data showed.

Commodity exporters also felt the pain, with international debt issued by oil exporters Angola and Gabon, as well as copper producer Zambia, all suffering losses of around 4 cents.

“The dramatic price moves reflect the double whammy of US President Trump’s reciprocal tariffs on the rest of the world and OPEC-induced lower oil prices,” Stuart Culverhouse of Tellimer said in a note to clients.

After Trump’s initial tariff announcement on Wednesday, there was a sharp divergence in the performance of hard-currency bonds issued by emerging market nations.

Those with lower credit ratings – known as high yield – suffered the biggest losses, while debt from investment-grade nations outperformed, Citi said in a note to clients.

Now, yields on benchmark international bonds in nearly all Sub-Saharan African countries – bar relatively highly rated Namibia and the Seychelles – have soared above 10%, according to Tellimer’s Culverhouse.

Double-digit yields are widely seen as an indication of unsustainable borrowing costs.

This news is sourced from The Express Tribune and is intended for informational purposes only.

News Desk

Your trusted source for insightful journalism. Stay informed with our compelling coverage of global affairs, business, technology, and more.

Recent

A Strategic Checkmate: The Defense Pact Reshaping the International Relations

A Strategic Checkmate: The Defense Pact Reshaping the International Relations

The 2025 strategic defense pact between Pakistan and Saudi Arabia marks a major diplomatic milestone. Strengthening military and economic ties, it enhances Pakistan’s regional influence, bolsters Gulf security, and positions Islamabad as a key player between China, the US, and the Middle East. The agreement reflects a blend of constructivist and realist strategies, reinforcing Pakistan’s leadership role in the Muslim world.

Read More »
Anatomy of a Diplomatic Failure: The 20-Point Gaza Plan

Anatomy of a Diplomatic Failure: The 20-Point Gaza Plan

A 20-point Gaza peace plan, initially hailed by a coalition of eight Muslim-majority nations, represented a rare moment of consensus in Middle East diplomacy. But this optimism was short-lived. Following a pivotal meeting between US and Israeli leaders, the plan was radically altered, transforming a multilateral framework into a security-centric arrangement that alienated its initial backers and triggered a crisis of trust. This is the story of how a potential breakthrough unraveled into a diplomatic failure.

Read More »
Nepal’s Counter-Revolt: Challenge for the Communist and the Left in South Asia

Nepal’s Counter-Revolt: Challenge for the Communist and the Left in South Asia

Nepal’s counter-revolt exposes decades of political betrayal by mainstream and leftist parties alike. Despite revolutionary promises to abolish feudalism, ensure sovereignty, and deliver land reforms, leaders from Congress to Maoists succumbed to corruption and power politics. Today’s uprising is both a rejection of failed communist leadership and a warning for the Left in South Asia.

Read More »