EM Credit Weekly: At another critical juncture

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EM Credit Weekly: At another critical juncture

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30 Jul 2026 11:12:04 ET │ 15 pages

EM Credit Weekly

At another critical juncture

CITI'S TAKE

Nikola Apostolov AC

The current macro backdrop suggests continued pressure on the USD, +44-20-7986-6499

steeper curves, and episodically tighter financial conditions. At the same nikola.apostolov@citi.com

time, geopolitical uncertainty, trade-policy risks, and growing concerns

over the returns on AI-related investment by hyperscalers are contributing Donato Guarino AC

to a more volatile and selective market environment. For EM credit, this +1-212-723-3298

environment creates a mixed backdrop: a weaker dollar is supportive of donato.guarino@citi.com

external financing conditions and EM asset performance, but tighter

financial conditions, elevated rates volatility, and record primary supply are Alexander Rozhetskin AC

likely to limit spread compression. Indeed, softer risk sentiment and +44-20-7508-4787

pressure on equities have already contributed to a modest widening of alexander.rozhetskin@citi.com

roughly 7-10bp in EM credit spreads over the past two weeks.

Luis E Costa, CFA AC

Dear clients, please note that EM Credit Weeklies will not be published in August. +44-20-7986-9757

We look forward to restarting this publication in September. luis.costa@citi.com

Senegal – Split between Diomaye and Sonko now formalized as president launches

new party. We still see fair value as lower from here even as our survey results

suggest that over a third of respondents expect recovery values could exceed 55

cents.

Bolivia – Bolivia secured a US$1.9bn IMF-supported program, providing an

important policy anchor and liquidity backstop as the country confronts persistent

external and fiscal pressures. We remain neutral.