Pakistan’s currency fell to a record low of 255 rupees against the US dollar today, according to local media reports. The crash came after the cash-strapped government loosened exchange rate controls to secure much-needed loans from the International Monetary Fund (IMF).
A currency exchange company in Pakistan said it would lift restrictions on the dollar/rupee rate from Wednesday, allowing the local currency to slowly depreciate on the open market.
The Pakistani rupee fell 24 rupees and was trading at 255 rupees against the US dollar at 1pm, according to the Express Tribune.
The IMF had asked the Park government to end its control and let market forces determine the currency rate, a condition that was easily accepted. Pakistan is seeking approval from international bodies to acquire the currently stalled $6.5 billion in funding.
Pakistan won an IMF bailout last year, but the release of funds has stalled this year.
Pakistan’s low foreign exchange reserves have led to massive food inflation. In some parts of the country, packets of flour sell for as high as his 3,000 rupees. Videos of people fighting over food and chasing food trucks have gone viral on social media.
The country is plunged into darkness due to repeated blackouts.
“We can’t do anything. Everyone is sitting around doing nothing. We can’t operate the machines,” says Zafar Ali, who runs the workshop.
Pakistan’s central bank also hiked interest rates to a 24-year high this week to counter surging prices.
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