To help secure funding from the International Monetary Fund, officials relaxed their control over the rupee, which caused it to plunge more than Over 4% decline in the Pakistani Rupee resulting in a new record low
Following a 7% decline on Thursday, the rupee dropped as much as 4.2% to a record 259.7148 to the dollar, according to Bloomberg’s statistics. The IMF has halted its $6.5 billion rescue for months, and one of the main conditions for resuming is a more market-determined currency.
Power outages, a lack of dollars, and political unrest pose a threat to plunge the country into even deeper disaster, and Prime Minister Shehbaz Sharif is working to keep the economy afloat. Next week’s loan negotiations will provide officials with another chance to persuade the IMF to release the urgently required cash and support the restoration of the country’s foreign exchange reserves.
The decision of Pakistan’s money exchange companies to remove the cap on the dollar-rupee rate in the open market was what caused the rupee to fall this week. Due to the dried-up supply of dollars among onshore money-changing firms, locals turned to the black market as it offered dollars at a 10% markup from advertised rates.