Business & Economy

Pakistani rupee drops to historic low amid IMF talks

Islamabad, May 18 (EFE).- The Pakistani rupee on Wednesday plummeted to a new all-time low, trading at a little under 200 rupees per United States dollar, even as discussions over a bailout package were launched in Qatar between a government delegation and the International Monetary Fund.

The Pakistani currency has been trapped in a devaluation spiral over the past month, since former prime minister Imran Khan was ousted in a no-confidence motion and a new government led by Prime Minister Shehbaz Sharif was sworn in.

As per the State Bank of Pakistan, the US dollar was being purchased at 198.39 rupees on Wednesday, up from 174.5 rupees on Tuesday.

Economists have attributed the sharp depreciation of the currency to the rising import bill, dwindling foreign currency reserves and authorities resisting the implementation of some of the harshest IMF demands.

“In the absence of political stability in the country the foreign reserves are depleting and investors are taking out their dollars from the market,” economist Muzamil Aslam told EFE

After the political crisis that preceded Khan’s ouster, he has intensified his political campaign with almost daily rallies ahead of the much-anticipated general elections.

In 2019, Pakistan had signed a financial bailout package worth $6 billion with the IMF, and the current government on Wednesday launched a series of negotiations in Qatar to secure the release of $1 billion from the package.

Khan had continued to subsidize petroleum products in the country in violation of the IMF conditions.

Sharif’s government has so far not dared to cut public spending fearing public ire, although economists have insisted that the leader would have to comply with the fund’s requirements to save the bailout deal. EFE


Related Articles

Back to top button