Pakistan’s bonds inched up along with a 4% jump in the Pakistani rupee (PKR) yesterday on news that the nation has halved its trade deficit in July to $2.6bn and that it is making progress in receiving a bailout from the IMF. Bloomberg notes that export-related payments rose and an imposition of import curbs reduced its imports by 13% to $4.9bn YoY, contributing to the improvement in its trade deficit. The curbs also reduced the demand for the dollar, in turn strengthening the PKR. Additionally, Esther Perez Ruiz, IMF’s country representative said that Pakistan has fulfilled all of IMF’s requirements before the loan review, renewing optimism that it will be able to avoid defaulting on its sovereign obligations amid dwindling reserves. Finance minister Miftah Ismail said, “Pakistan by having an IMF program, by introducing a significant tight budget and depressing demand for imports has weathered the storm.”

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