The Pakistani currency fell to a record low of ₹ 255 against the US dollar today, according to local media reports. The fall came after the cash-strapped government loosened its grip on the exchange rate to win a much-needed loan from the International Monetary Fund (IMF).
Pakistan’s money exchange companies removed the dollar-rupee rate limit from Wednesday. And said they would allow the local currency to depreciate in the open market.
The Pakistani rupee fell by Rs 24 and was trading at ₹ 255 against the US dollar at 1 pm, The Express Tribune reported.
The IMF asked the Pakistani government to end its controls and let market forces determine the exchange rate, a condition that was readily accepted. Pakistan is seeking the global body’s approval to receive $6.5 billion in funding, which is currently on hold.
Although Pakistan won an IMF bailout last year, the release of funds has stalled this year.
Low foreign exchange reserves in Pakistan have led to rampant food inflation. In some parts of the country, a packet of flour is selling for up to Rs 3,000. Videos of them fighting for food and chasing food trucks are doing the rounds on social media.
Zafar Ali, who runs the workshop, said, “We couldn’t do anything. Everyone is sitting idle. We can’t run any machines.”
Pakistan’s central bank also raised interest rates to a 24-year high this week to combat rising prices.