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Investors are calling on multilateral lenders to do more to support countries that are struggling to repay debts as global funding conditions dry up.

How to help indebted countries regain access to credit markets was a common theme of discussion in panels at an International Monetary Fund conference in Washington DC Thursday.

“I’m just hoping there’s some leadership from Washington now, especially the multilaterals, in terms of acknowledging there’s a chock in many parts of the world which needs to be released,” said Hari Hariharan, the chief executive officer of New York-based hedge fund NWI Management. “But, we’ll see. I’m not very hopeful.”

Ghana has had to scrap plans to sell bonds as borrowing costs rise this year, while Egypt has yet to make any public offerings of foreign-currency debt as it grapples with a dollar shortage, a devaluation of his currency, and the spillover effects of Russia’s invasion of Ukraine.

This year’s selloff in emerging-market dollar debt even dwarfs losses made during the 2008 financial crisis. 

A Bloomberg gauge of the bonds has slumped more than 20 percent, heading for its worst year on record. Those losses have hurt nations already struggling to meet their financing needs.

All eyes are on Egypt, the largest Arab nation, which has been in talks with the IMF for funding for more than six months. – Bloomberg

Finance Minister Mohamed Maait told Bloomberg in September that Egypt hopes to reach an IMF deal within one or two months, although the loan amount is yet to be determined.

“At this point in time you would’ve expected vibrant IMF leadership,” Hariharan said. “Instead of just parsing out of a few words saying ‘we’re in discussions.’”

Typically, an IMF loan helps restore market access for countries that have been shut out, according to Gorky Urquieta, a money manager at Neuberger Berman. That hasn’t been the case for some high-yielding nations working with the IMF this year.

“That means that they’re going to have to do more, or they’re going to have to rely more on their domestic markets,” he said.

A sovereign debt crisis has been building in the developing world all year, according to strategists from Deutsche Bank AG and Goldman Sachs. China’s economic slowdown and property sector meltdown, Europe’s energy shortage and an aggressive Federal Reserve hiking cycle have all added fuel to the fire.

“We really haven’t seen multilateral support step in,” Ana Jelenkovic, director and sovereign strategist at Marathon Asset Management, said at another IMF panel Thursday. “It’s really every man, central bank, sovereign for themselves.”

Bloomberg