Strategy Note /

PAKISTAN: Downside risk before positive IMF catalyst

    Christopher Dielmann CFA
    Christopher Dielmann CFA

    Director, Macroeconomic & Sovereign Research

    Tellimer Research
    9 July 2018
    Published byTellimer Research
    The valuation of Pakistan’s US$-denominated sovereign Eurobonds and local equities already reflect a lot of macroeconomic and FX rate concern. However, there is more potential downside in the near term, eg a further 10% FX rate devaluation. A PTI-led coalition is the likeliest winner of the 25 July election and this may prompt capital flight of the undocumented wealth that has enjoyed protection over the past decade from PMLN- and PPP-led governments.