According to Prag News article published on January 30, 2023, Pakistan's currency fell to a historic low of 270 against the dollar as the government surrendered its control over the exchange rate in order to meet the International Monetary Fund's (IMF) demands for a bailout. Notably, Pakistan is facing its 'worst-ever economic crisis' since independence.
Reportedly, the currency was devalued by 7.50 PKR (or 2.77%) on the third consecutive day, reaching an all-time low of 270.10 PKR against the US dollar.
In the last four days, the Pakistani rupee has dropped by Rs 35 against the US dollar. It has dropped by 39.21 PKR (or 14.50%) in the three days since Wednesday's close of 230.89 PKR.
The Pakistani rupee fell after the government lifted an unofficial cap on the USD-PKR exchange rate in order to revive the halted International Monetary Fund (IMF) loan program.
"The wide gap between demand and supply of the greenback in the system pushed importers to pay 270 PKR per dollar," KASB Securities Head of Research Yousuf Rahman told The Express Tribune.
Pakistan has been hit by the worst economic crisis in decades, dealing with decades-high inflation, reduced GDP growth, and depleting foreign reserves. The country is desperately seeking IMF help to avoid default, but the international financial agency has demanded concrete reforms, including an increase in petroleum prices.
Pakistan Prime Minister Shehbaz Sharif has also constituted a National Austerity Committee (NAC) to recommend measures to reduce the cost expenditures of various departments. According to local media sources, the group has suggested a 10% pay drop for government personnel and a 15% reduction in ministry and division spending.
