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Pakistani rupee hits all time low of 255 to a dollar amid economic meltdown

Pakistani rupee touches an all time low (Pic credit: IANS)

Amid news that the International Monetary Fund (IMF) may resume the stalled loan package, the Pakistani rupee touched an all time low of 255 to a US dollar in the interbank market on Thursday. In a single day the currency fell by Rs 24.11 — 9.45 per cent after the government support to the currency ended. The IMF has asked the government to let the market forces (mostly commercial banks) determine the exchange rate, local newspaper the Express Tribune said, adding that this is among the four major conditions that the multilateral lender has attached.

After Ishaq Dar took charge as the finance minister in September, replacing Miftah Ismail, the Pakistani rupee has been strengthening due to government support. The other IMF riders include increasing taxes and lifting import restrictions. Dar has advocated market intervention to prop up the Pakistani rupee.

Pakistan is currently reeling under high inflation coupled with shortage of goods, including food items. The country’s factories are now struggling to stay afloat as the cash starved government has not been able to pay up the containers stuck at its ports. This could lead to a huge disruption in the supply chain adding to more problems for Islamabad, which has to make a repayment of $73 billion by 2025. The country is also staring at an acute fuel shortage due to dipping foreign exchange reserves. The current foreign exchange reserves are at $4.6 billion.

Also read: Will Finance Minister Ishaq Dar take responsibility for Pakistan’s economic crisis?