KARACHI: The rupee continued its downward trend against the dollar for the fourth consecutive session in the interbank market on Tuesday. The rupee closed at 280.42 per dollar, a decline from the previous closing rate of 280.37.
In the open market, the rupee experienced a slight decrease, trading at 282.04 against the dollar, compared with 282.02 in the previous session.Analysts said that the local currency’s decline is largely due to uncertainty surrounding the finalisation of the staff-level agreement (SLA) with the International Monetary Fund (IMF). This agreement is crucial for the release of the second $1 billion tranche under the $7 billion Extended Fund Facility. Market participants are concerned that none of Islamabad’s proposals were accepted by the IMF team, raising doubts about whether the SLA is progressing or if additional measures are required to secure approval for the review from the global lender.
“The IMF’s refusal to grant waivers on the tax collection target leaves the government with limited short-term options, especially since the Petroleum Development Levy (PDL) has already been increased to cover part of the shortfall,” said Chase Securities in a note. “However, the government has assured the IMF that it will generate additional revenue by resolving pending court litigations -- primarily related to the Super Tax -- which could potentially yield a significant amount,” it added.