Default fears keep rupee under pressure

The forthcoming repayment of $1 billion by Pakistan for a maturing Sukuk on December 5, 2022 has kept the rupee under pressure against the US dollar as the foreign exchange reserves continued to deplete over the past 11 months. The domestic currency inched down by 0.05% (or Rs0.11) to a new six-week low at Rs223.92 against the greenback in the inter-bank market on Thursday. A market expert pointed out that the forthcoming repayment of $1 billion had built pressure on the rupee. Earlier, the delay in International Monetary Fund’s (IMF) ninth review of its $6.5 billion loan programme led to the rupee’s depreciation for the second consecutive working day. The delay in IMF’s review has blocked new loan inflows as most of the multilateral and bilateral creditors including the World Bank, Asian Infrastructure Investment Bank, China and Saudi Arabia are waiting for the clearance of the review. These developments are not letting the rupee to sustain recent gains. It had been around 217 to a dollar in the first week of October.