The Pakistani rupee fell to a historic low on Thursday at 255.43 rupees to a dollar. The latest fall of 24.11 Pakistani rupees came as Islamabad lifted the exchange cap to unlock a bailout from the International Monetary Fund (IMF). Exchange Companies Association of Pakistan President Zafar Paracha told AFP the cap was lifted on Wednesday “in consultation with the state bank”.
Mohammad Sohail, the CEO of Topline Securities, told AFP: “Inflation is bound to rise further.”
Pakistan is drastically short on foreign reserves owing to persistently rising demand for the dollar.
Reports citing Pakistani government officials suggest that the country is in dire economic straits. It is reportedly left with foreign exchange reserves enough to pay only around three weeks of imports. This, added with the burden of external debt, has made the Pakistani economic forecast the worst in recent history.
The Pakistani rupee recorded a 9.6 per cent decline, in the second-biggest drop in a single session, brokerage Topline Securities said, according to news agency AFP.
Pakistani Rupee: Which was the previous low against the dollar?
Pakistan recorded a low of 240 rupees against a dollar in July 2022, at the height of devastating floods that the country faced.
The state of Pakistan economy: How bad is it?
Thousands of shipping containers packed with raw materials for industry, foodstuffs, and medical equipment are being held up at Karachi port because banks have refused to guarantee importers’ dollar transactions. The country also suffered from a nationwide electricity outage earlier this week, linked to a cost-cutting measure, estimated to have cost the textile industry alone $70 million.
Prime Minister Shehbaz Sharif, who ousted former Prime Minister Imran Khan Khan in a no-confidence vote earlier last year, has also been reluctant to meet loan conditions amid falling popularity and political volatility.
(With inputs from agencies)
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