According to data from the central bank, the Pakistani rupee dropped 9.6% against the dollar on Thursday and is still in the same position on Friday.
This is the biggest one-day drop in more than 20 years, and it may have convinced the International Monetary Fund (IMF) to resume lending to the nation.
The decline occurs after foreign exchange firms abolished an exchange rate cap, which was a crucial requirement of the IMF as part of a package of economic reforms it had agreed upon with the cash-strapped South Asian nation.
USD trading against Pakistani Rupee
According to the central bank, the currency’s official value against the dollar ended the day at 255.4 rupees, up from 230.9 on Wednesday. Friday’s market opens for interbank trade at Rs. 255.45 versus the US dollar.
Pakistan is in critical need of external finance as a result of its severe balance of payments problem. Its foreign exchange reserves, which only have enough money to cover less than three weeks’ worth of imports, dropped by $923 million to $3.68 billion in the most recent figures.
In 2019, Pakistan received a $6 billion IMF bailout. A further $1 billion was added to it last year to assist the nation in recovering from disastrous floods, but the IMF then suspended payments in November as a result of Pakistan’s failure to make further progress with fiscal restructuring.
On Thursday, the lender disclosed that it would dispatch a mission to the nation at the end of January to talk about restarting the program.
The IMF emphasized in its statement on Thursday that it is pushing for the government to go to a market-determined exchange rate regime in addition to wanting it to implement fiscal measures.
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