Islamabad: The Pakistani rupee fell to a historic low on Thursday at 255.43 rupees to a dollar. The latest fall of 24.11 Pakistani rupees came as Islamabad lifted the exchange cap to unlock a bailout from the International Monetary Fund (IMF). Exchange Companies Association of Pakistan President Zafar Paracha told AFP the cap was lifted on Wednesday “in consultation with the state bank”.
Mohammad Sohail, the CEO of Topline Securities, told AFP: “Inflation is bound to rise further.”
Pakistan is drastically short on foreign reserves owing to persistently rising demand for the dollar.
The IMF had asked the Pak government to end its control and let market forces determine the currency rate, a condition that was readily accepted. Pakistan has been looking to win the global body’s approval to get $6.5 billion in funding which is currently stalled.
While Pakistan won an IMF bailout last year, the release of funds has been stalled this year.
The low forex reserve in Pakistan has led to massive food inflation. In some parts of the country, a packet of flour is being sold for as high as Rs. 3,000. Videos of people fighting for food and chasing food trucks are doing the rounds on social media.
The country has also plunged into darkness owing to frequent blackouts.
“We haven’t been able to do anything. Everybody is sitting idle. We can’t operate any machines,” says Zafar Ali, who runs a workshop.
Pakistan’s central bank this week also raised interest rates to a 24-year high to fight surging prices.
