Rupee breaches 200-a-dollar barrier.

The rupee continued its free fall against the US dollar in the inter-bank market on 10th consecutive working day on Thursday, closing for the first time ever at 200 to a dollar amid warning from experts that the current slide in the value of the Pakistan currency might not stop there.

The rupee slumped 0.80% or Rs1.61 to hit a new all-time low of Rs200 to a dollar and a further drop may not be ruled out considering the 'country is gradually moving towards a default-like situation', currency dealers said.

The Pakistani currency had closed at Rs198.39 on Wednesday, according to the central bank. The dealers said that cumulatively, in the past 10 days, the rupee has depreciated 7.70% or Rs14.31 against the dollar.

The rupee fall on Thursday came on the second-day of the government's talks with the International Monetary Fund (IMF) in Doha for the resumption of the multibillion dollar loan programme.

'The latest depreciation has raised red flag over the fast deterioration in the country's balance of international payment crisis,' Tahir Abbas, the head of research at the Arif Habib Limited (AHL), told The Express Tribune.

Pakistan needs over $7 billion to repay the foreign debt and finance the current account deficit over the next months. On the contrary, the country's foreign exchange reserves have dropped to a critical low level of less than six weeks of import cover at $10.3 billion.

'Where would the country's foreign exchange reserves stand after making such international payments, while there are only outflows and no inflows at present,' Abbas said, adding that the yields on Pakistan's Eurobond, maturing in 2024, shot to a historical high of 21% on Thursday.

Read Rupee posts fresh slump

'This suggests the country risk of default has shot to a very serious level,' he said. The prevailing yields suggested the value of Eurobond has lost next to nil. The yields used to hover around 6-8% in the days of economic stability in the country, he...