Senegal’s dollar bonds fell sharply for a second day on Friday, as investor anxiety over the country’s strained public finances persisted despite government attempts to calm markets.
Finance Minister Cheikh Diba told lawmakers during a question-and-answer session that talks with the International Monetary Fund were progressing “very well” and “in a serene manner”. But he admitted Senegal’s debt burden put at the equivalent of 119% of GDP was cause for concern.
He said the IMF did not consider Senegal insolvent but warned of liquidity pressure, noting the country needs around 6,000 billion CFA francs (about US$9.7 billion) in financing each year. “The IMF believes we cannot ensure this financing year after year over the debt sustainability horizon. We believe it is possible,” he said.
Financial markets were not convinced. According to Bloomberg data, Senegal’s 2033 dollar bond dropped 1.6 cents to 61.7 cents on the dollar by late afternoon in London, extending Thursday’s losses. The 2031 note fell even further, sliding 2.5 cents to 64.64 cents.
IMF warns global growth still “worse than needed”
