Senegal: Going from bad to worse (flash)

• Reports of a political rift between President Faye and Prime Minister Sonko risks further delays on an IMF agreement

• News of a rift follows PM Sonko's comments over the weekend that imply the IMF is seeking a restructuring

• Bonds are down sharply this week, with prices falling to (or testing) new lows

  
  

It's been a bad week for Senegal's bonds. Local reports this week of a political rift between President Faye and Prime Minister Sonko follow restructuring talk over the weekend, leaving the bonds sharply down across the curve. The '33s have fallen by 8pts since last Thursday's close to their lowest level not only this year but since they were issued eight years ago.

This all comes after the IMF mission left Dakar last week without reaching an agreement on a new programme. This left markets disappointed, although we were a bit more optimistic as talks were expected to continue.

Political rift

The rift reflects internal divisions over the leadership of the ruling coalition. This comes after reports that PM, and Pastef leader, Sonko called on the President Faye to remove two of Faye's allies over the weekend. Instead, President Faye reportedly dismissed an ally of PM Sonko, the coalition's political coordinator, Mrs Aissatou Mbodj, on Tuesday. In response, the Pastef party said the president did not have the power to dismiss Mrs Mbodj and rejected Faye's appointment of former prime minister Mrs Aminata Toure as her replacement.