Salvadoran bonds continue to rise on the back of IMF pre-agreement

Salvadoran bonds ranked number one in the top 20, followed in the top 5 by Ghana $51,606, Argentina $41,774, Ecuador $51,792 and Senegal $85,378.

El Salvador’s bonds register the highest rises in emerging markets this Tuesday, after the country reached preliminary understandings with the International Monetary Fund (IMF) in the negotiation of a new financing agreement.

In the table shared by President Nayib Bukele in X, the country’s bonds maturing in 2034 report a 7.68 % growth in the last five days and are quoted at $74.604. The note recovered after closing last week at $71.76.

Thus, Salvadoran bonds are number one in the top 20, followed in the top 5 by Ghana $51,606, Argentina $41,774, Ecuador $51,792 and Senegal $85,378.

According to an analysis by the consulting firm Exor, prices rose sharply, with increases between 4.08 % and 8.66 %, depending on the bond. “This suggests that the market expects IMF-supported reforms to have sustained effects on the country’s economic stability,” the firm notes.

“The IMF’s August 6, 2024 announcement of a possible agreement with El Salvador has generated a positive reaction in the country’s Eurobonds. Yields on these bonds, especially short-term bonds, have declined notably, reflecting increased investor confidence in the country’s ability to meet its financial obligations. At the same time, bond prices have risen, approaching par value, indicating a perception of lower risk,” he adds.

Source: Diario El Salvador