The Pakistani rupee continued to decline in value on Thursday as the US dollar rose to Rs229.98 in the inter-bank market, setting a new record.
As the economic challenges facing the country have increased, the dollar has seen a corresponding increase in value, making it more expensive for Pakistan to import oil.
The fresh high of the USD comes in response to the rising demand for foreign currency, despite a lack of supply in the interbank market.
The State Bank of Pakistan has stated that the current account situation and news of internal uncertainty have led to the significant depreciation of the rupee. The dynamic market-based exchange rate system has caused the value of the rupee to fluctuate daily.
The central bank highlighted that the dollar’s appreciation is also a consequence of an assertive interest rate policy adopted by the United States Federal Reserve to rein in internal inflation.
To stabilize the rapidly deteriorating Pakistani economy, Prime Minister Shehbaz Sharif has requested an urgent meeting with the International Monetary Fund. With foreign loan inflows halted and the value of the rupee plummeting, Pakistan is in dire need of financial assistance. The IMF’s quick approval of a bailout package would help to mitigate the growing economic crisis in Pakistan.
Shehbaz directed Finance Minister Miftah Ismail to request the IMF for approval of Pakistan’s loan before going on recess from next month, at least three meeting participants told.
The prime minister chaired a meeting shortly after Ismail and a senior official of the SBP held separate meetings with journalists in Islamabad. They explained the reasons behind the rapid fall in the value of the rupee and the jittery markets.
The nation is now able to offload its two LNG-fired power plants to the United Arab Emirates (UAE) at an agreed-upon price within a few days by expediting the competitive privatisation process that would typically take about one and a half years.
The government is also willing to give a seat to the UAE government on its blue-chip companies for another $1 billion to stop the current economic meltdown – that, too, through a government-to-government deal and promulgating a presidential ordinance.
