By Lisa Pauline Mattackal
(Reuters) – Prices of Rwanda’s dollar bond fell on Monday after M23 rebels backed by the country entered the largest city in the east of neighbouring Democratic Republic of Congo, in a sharp escalation of a long running conflict.
An alliance spearheaded by the ethnic Tutsi-led M23 militia marched into Goma, which lies on the border with Rwanda. Congolese and Rwandan troops exchanged fire across the border.
Rwanda’s dollar-denominated 2031 bond fell about 1.33 cents to trade at 83.81 cents on the dollar, Tradeweb data showed, its lowest since Dec. 23.
The European Union’s foreign ministers urged Rwanda to stop its support of M23 and withdraw troops, while the United States, France and Britain condemned what they said was Rwanda’s backing of the M23 rebel advance at a United Nations Security council meeting on Sunday.
“The move in (Rwanda’s) Eurobond is simply pricing in the risk that sanctions do get weighted heavily on Rwanda, but it’s simply too early to say what the fall out will be here,” said Charlie Bird, trader at Verto.
However, the timing of the advance signaled that “this is a clear sign that Rwanda feels the likelihood of a backlash of sanctions is significantly low,” Bird added.
The move also tracked a broader risk-off mood in emerging and frontier markets, with investors unsettled by threats of U.S. tariffs and an uncertain outlook for the Federal Reserve ahead of its interest rate decision later in the week. [EMRG/FRX]
(Reporting by Lisa Mattackal and Shashwat Chauhan in Bengaluru; Editing by Gareth Jones)
