$500m eurobond payment: Rupee might come under pressure

[LahoreEstate]

KARACHI: The local currency is likely to come under severe pressure on Thursday when the government pays $500 million to its eurobond investors. A banker said the dollar had risen to Rs 80.50 during trade on Wednesday but had closed at Rs 80.00 as central bank warned banks against speculation. He said the rupee was likely to come under pressure once again on Thursday because of the large payment by the government. Another banker said there were import payments as well, which had eroded significant value of rupee during last few sessions. The rupee had been stable since the government received the first tranche of $3.1 billion loan sanctioned by International Monetary Fund, but increased demand for dollar by importers recently has taken its toll on rupee's health. The rupee lost some 32 percent from July 2007 to October 2008 because of huge trade and current account deficits. staff report

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