A currency dealer counts Pakistani rupee notes as he prepares to exchange US dollars in Islamabad, Pakistan. file | photo credit: Reuters
Cash-strapped Pakistan’s currency fell against the dollar on Thursday after the government indicated it was ready to adhere to tougher conditions set by the International Monetary Fund for the next tranche of its bailout package.
Pakistan is seeking a crucial $1.1 billion tranche from the fund – part of its $6 billion bailout package – to avoid default. Talks with the IMF on reviving the stalled bailout over the past months.
On Wednesday, the rupee had closed at 230 against the dollar. It slipped further and was trading at 255 for $1 within hours of the market re-opening on Thursday. The government did not immediately comment on the development.
Analyst Ahsan Rasool says the fall in the rupee is a sign that Pakistan was close to securing a much-needed loan from the IMF.
The rupee’s fall comes days after Prime Minister Shahbaz Sharif said that his government was ready to comply with “tough conditions of the IMF” to revive the $6 billion bailout package that was approved last year. Has been stalled for several months.
Pakistan is currently facing the country’s worst economic crisis amid dwindling foreign exchange reserves. This has raised fears that Pakistan could default, although Mr Sharif insists he pulled the country from the brink of default when he took power last year.
Mr. Sharif blamed Prime Minister Imran Khan and his government for the economic plight. Mr Khan was ousted in a vote of no confidence in parliament in April, and has since been campaigning for early elections.