Pakistan’s sovereign dollar-denominated bonds rallied in advance of weekend elections for prime minister, Tradeweb data showed on Friday.

The 2027 maturity gained the most, rising around 1 cent to trade at 77.3 cents.

Pakistan’s newly-formed ruling alliance nominated Shehbaz Sharif as prime minister in an election scheduled for March 3, and his bid is expected to succeed.

The country’s embattled economy has a narrow path to recovery, and a crucial IMF agreement expires on April 11.

The premium demanded by investors to hold Pakistan’s international bonds over safe-haven US Treasuries has tightened to 955 bps - its lowest level since May 2022 and dipping below the psychological 1,000 bps threshold, according to data from the JPMorgan EMBI Global Diversified Index.

Pakistan’s benchmark share index also rose 1% on Friday, according to the Karachi stock exchange website.