Pakistan rupee going south: US dollars up by another 24 paisa

Amid reports of one billion US dollar reduction in foreign reserves last month, Pakistan is set to pay a $1 billion sukuk bonds today (Friday),

According to Bloomberg, the plan means Pakistan will dodge the risk of a near-term default to even as worries over its ability to pay its long-term debt remains.

The government had decided to repay the amount, due Dec 5, three days before its maturity.

In this connection, SBP Governor Jameel Ahmad had made the announcement last week at a briefing.

Meanwhile, the bonds have recovered to 97.90 cents on one dollar, close to the par value of 100, after dropping to 81.86 cents in October.

While Pakistan is expected to meet its short-term debt obligations, its longer-term bonds are still trading at distressed levels as investors worry over its ability to emerge from a crisis.

Moody’s Investors Service and Fitch Ratings downgraded the nation deeper into junk in October after devastating floods jeopardized its fiscal health.

As the talks with the IMF For the next tranche of about $600 million have also been delayed, Pakistan needs to repay about $25 billion in the year started July, though most of it has been rolled over or paid, Jameel has said.

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