Pakistan faces worst economic crisis since 1947; Rupee plunged to its lowest against US dollar

Pakistan: After the cash-strapped government relaxed its grip on the exchange rate to win much-needed loans from the (IMF), Pakistan’s currency has fallen to a record low of Rs. 255 against the US dollar.

Moreover, the Washington-based company, IMF had asked the Pakistani 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 in November 2022, the country has won an IMF bailout, the release of funds has been stalled this year.

Pakistani currency fell by Rs. 24

Amid the crisis, on Wednesday, Pakistan’s money exchange removed the limit on the dollar-rupee rates. According to the officials, they will let the local; currency drop slowly in the open market.

The currency has fallen by Rs. 24 and was trading at Rs 255 against the US dollar, said a media report.

Speaking to the media, Financial expert Malik Bostan said that the value of the rupee dropped mainly due to the delay in the revival of the IMF’s bailout talks, amid depleting foreign exchange reserves, but expected it to stabilise as the negotiations pick up again.

On Thursday, the fundraiser company’s resident representative said an IMF vision will visit Pakistan later this month to discuss the stalled ninth review of the country’s current funding programme.

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Worst financial crisis

The country has dived into the worst economical and political crisis since Pakistan’s formation in 1947. Several people are on the roads fighting for bread and butter.

According to the experts, they have issued alerts regarding the financial crisis prevailing in the country amid fairs that the nation might get shrouded in the dark clouds of bankruptcy.

A survey states that the current situation is such that the central bank of Pakistan has a paltry $4.4 billion in reserves, which is barely enough for three weeks of imports. Recently, the central bank increased its benchmark interest rate to 17%, the highest in more than 24 years. In the meantime, the nation is already facing a 25 per cent inflation rate and the breakdown of the supply chain may cause hyperinflation in a country that might be in for more imported inflation due to steep currency devaluation.

Pakistan has been plunged into the darkness owing to recurring blackouts.