Senegal’s international bond prices rose sharply on Monday, buoyed by growing investor optimism over the prospects of a new lending programme with the International Monetary Fund (IMF), traders and analysts said.
Senegal’s dollar-denominated bonds led the gains, with the 2033 maturity climbing about 2.8 cents to trade near 62 cents on the dollar, its highest level in around five weeks, according to Tradeweb data. Euro-denominated Senegalese bonds also advanced by more than 2 cents.
The rally followed a prolonged sell-off that pushed Senegal’s bonds to record lows in mid-December, amid concerns over debt sustainability and uncertainty surrounding negotiations with the IMF.
“Senegal had a difficult year in 2025, with bonds trading at levels that largely priced in a restructuring,” said Carmen Altenkirch, emerging markets sovereign analyst at Aviva Investors. “However, a solid bond auction on the regional market and the prospect of an IMF visit in January have created some optimism.”
She added that if Senegal were able to conclude a credible IMF agreement and demonstrate commitment to fiscal consolidation, bond yields could fall further, although risks remain elevated. The yield on Senegal’s 2033 dollar bond stood near 16%, reflecting continued investor caution.
Bond prices have been recovering since late December, when Finance Minister Cheikh Diba told lawmakers that the government aimed to finalize an IMF programme “very quickly.” He said discussions with the Fund were progressing well, with agreement already reached on correcting key economic data, while negotiations continued on budgetary and debt-related issues.
The IMF is expected to appoint a new mission chief for Senegal in January, a step investors see as potentially accelerating talks.
“It’s market optimism about an IMF deal, perhaps a holding operation that would not require a debt restructuring but would give time for Senegal to prove whether it can service its debt,” said Charlie Robertson, head of macro strategy at FIM Partners.
Senegal’s relations with the IMF were strained in 2024 after authorities uncovered billions of dollars in previously unreported liabilities left by the former administration. The IMF later said Senegal’s public debt had reached about 132% of gross domestic product by the end of 2024, prompting the Fund to freeze a $1.8 billion lending programme.
The suspension forced the West African nation to rely heavily on regional bond auctions to meet its financing needs, increasing pressure on public finances and weighing on investor sentiment.
While optimism has returned in recent weeks, analysts cautioned that a sustained recovery in Senegal’s bond prices would depend on the successful conclusion of an IMF agreement and credible implementation of fiscal reforms aimed at stabilizing debt and restoring confidence.
For now, investors are watching January closely, as developments in talks with the IMF are expected to shape the outlook for Senegal’s debt markets in the months ahead.
