In intra-day trade in the inter-bank market on Thursday, the local currency sank to Rs207.7 against the US dollar, continuing its downward trend.

The rupee hit an all-time low against the dollar on Wednesday, closing at Rs206.46.

This was partly due to the strengthening of the dollar on the international stage, but it was also due to the local currency market anticipating a greater increase in inflation.

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Finance Minister Miftah Ismail had previously stated that the government’s budget for 2022-23, which was announced last week, failed to persuade the International Monetary Fund (IMF) to disburse the next tranche of Pakistan’s $6 billion loan programme, and that changes to the finance bill would be required.

The finance minister has declared unequivocally that the IMF is dissatisfied with the budget and that it will be revised.

Experts believe that the rupee would only stabilise if the amendments are put into the Finance Act. He predicted that the local currency will remain volatile in the coming days.

Pakistan’s government announced a third increase in petroleum prices in less than three weeks late Wednesday, as it tries to placate the IMF, which has emphasised the elimination of energy subsidies in order to resuscitate its bailout programme.

The next payment of the IMF scheme is slated to give Pakistan $900 million, but the global lender has put the programme on hold due to a variety of circumstances, including fuel subsidies and a worsening current account deficit. It has also stated that greater direct taxes are required.