The Pakistani rupee hit a record low on Tuesday as the nation battles to secure crucial IMF financing and investors grow increasingly concerned about the country’s declining foreign exchange reserves.
The local currency is down 1.03%, or Rs2.96, from Monday’s finish of 285 against the US dollar in the interbank market, where it is currently trading at 288.
On February 3, 2023, the rupee reached a new low, closing at Rs285.09 to the US dollar.
Financial experts assert that importers have resumed their panic purchases of US dollars even though the interbank market’s supply of foreign currency has stayed low.
Months after increasing taxes and energy costs and allowing the currency to depreciate to comply with IMF requirements, Pakistan’s loan plan has yet to materialise. The country has repeatedly missed dates to continue its bailout.
A $6 billion IMF rescue was obtained by the cash-strapped country in 2019. A further $1 billion was added to it last year to assist the nation in recovering from devastating floods, but the IMF then halted payments in November as a result of Pakistan’s failure to make further progress with fiscal consolidation.
The Washington-based lender has requested Pakistan to seek commitments for fresh loans from Saudi Arabia and the United Arab Emirates before it revives the bailout after months of fruitless negotiations.
Pakistan still needs to accomplish a few tasks before it qualifies for a $6.5 billion bailout, according to the resident representative of the IMF for Pakistan. For Sri Lanka to get out of its economic crisis, the lender last month authorised a $3 billion loan programme.