On Thursday, the Pakistani rupee hit a record low against the dollar, trading at 255.43. A rescue from the International Monetary Fund was unlocked when Islamabad lifted the exchange cap, allowing the most recent downturn of 24.11 Pakistani rupees.
The cap was lifted on Wednesday “after consultation with the state bank,” according to Zafar Paracha, president of the Exchange Companies Association of Pakistan, who spoke to AFP. Pakistan has a severe lack of foreign reserves as a result of the dollar’s continually rising demand.
According to reports from Pakistani government officials, the nation is in grave economic straits. It allegedly only has enough foreign exchange reserves to cover imports for about three weeks. The worst economic outlook for Pakistan in recent memory as a result of this and the weight of external debt.
In its second-largest drop in a single session, the Pakistani rupee fell 9.6%, according to brokerage Topline Securities, which was quoted by news agency AFP.
At the height of the country’s devastating floods, in July 2022, Pakistan’s currency reached a low of 240 rupees to the dollar.
How terrible is economic situation in Pakistan?
At Karachi port, thousands of shipping containers filled with supplies for industry, food, and medical equipment are being held up because banks won’t back importers’ dollar transactions.
The nation also experienced a statewide power outage earlier this week as a result of cost-cutting measures, which is thought to have cost the textile sector 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.
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