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Tuesday, March 28, 2023

Cash-strapped Pakistan’s rupee plunges amid talks with IMF

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Cash-strapped Pakistan’s currency has plunged against the dollar after the government indicated it is ready to comply with tough conditions set by the International Monetary Fund (IMF) for the next tranche of its bailout package.

Pakistan is seeking a crucial instalment of $1.1 billion (€1 billion) from the fund — part of its $6 billion bailout package — to avoid default.

Talks with the IMF on reviving the bailout stalled in recent months.

The rupee closed at 230 to the dollar on Wednesday.

It slipped further, trading at 255 for $1 within hours of the market reopening on Thursday.

The government did not immediately comment on the developments.

Analyst Ahsan Rasool said the rupee’s decline is a sign Pakistan is close to securing the much-needed loan from the IMF.

The rupee’s slide comes days after prime minister Shahbaz Sharif said his government is ready to adhere to the “tough conditions of the IMF” to revive the $6 billion bailout package, which has been on hold for several months.

Pakistan is currently grappling with one of the country’s worst economic crises amid dwindling foreign exchange reserves.

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