Kuwait Currency Peg in Spotlight With State Unable to Borrow
- 12-month forward contracts for dinar hit highest since March
- Fitch cut Kuwait outlook to negative, citing ‘liquidity risk’
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The Kuwaiti dinar’s peg to a basket of currencies is coming under scrutiny as concerns grow that one of the world’s richest nations is running short of cash.
Derivatives are showing signs of pressure after 12-month forward contracts on the Kuwaiti dinar rose to about 305 points in the offshore market Thursday, the highest since the oil rout in March. Most other Gulf currency forwards have declined this year as the recent recovery in crude prices eases the risks to their energy-dependent economies.