Rupee continues to lose steam, slumps to Rs207.67

• Rupee sheds Rs1.21 (or 0.58%) in interbank market against dollar.
• Local currency closes at Rs207.67 today. 
• Traders say rupee has been losing ground due to balance of payment crisis and falling foreign exchange reserves.

KARACHI: The dollar continued to rise against the Pakistan rupee on Thursday, zooming past Rs207 in interbank trade on Thursday. 

According to the State Bank of Pakistan (SBP), the local currency recorded a decrease of Rs1.21 (or 0.58%) as it hit Rs207.67. 

On Wednesday, the local currency shed Rs1.3 (or 0.63%) against the greenback to close at Rs206.46.

Traders said the rupee has been losing ground due to the balance of payment crisis and falling foreign exchange reserves. But, the International Monetary Fund's remarks on the measures announced in the budget added new pressure on the domestic currency.

The IMF has asked Pakistan to take “additional measures” to strengthen the budget and bring it in line with the key objectives of the fund programme.

Earlier speaking to Geo.tv, Arif Habib Limited Head of Research Tahir Abbas recalled that the finance minister, in the post-budget press conference on Saturday, said that the IMF had expressed concerns about the budget numbers, including fuel subsidies, a widening current account deficit, and the need to raise more direct taxes.

The analyst said: “Uncertainty in the market has begun since then.” He further identified quarter-end import payment pressure as another key factor behind this decline.

Abbas predicted that the local currency will stay volatile during the last month of the outgoing fiscal year 2021-22 — June.