What if Pakistan's IMF bailout stalls and the rupee tumbles?
Islamabad missing IMF reform targets stalls the bailout and tumbles PKGB bonds and the rupee on default fear — an idiosyncratic frontier credit event. Rhymes with Pakistan's mid-2022 to 2023 near-default before the last-minute SBA. The Gulf (Saudi/UAE) and China roll over the bilateral debt that keeps Pakistan solvent; the forward angle is that repeated brinkmanship has made friendly-creditor rollovers, not the IMF tranche itself, the true binding constraint.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. Islamabad misses IMF reform targets, the bailout stalls, and PKGB bonds and the rupee tumble on default fear. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Recession signal ▲ — which propagate through our causal graph to the markets below.