KARACHI, May 26(ABC): Pakistan’s rupee hit a record low on Thursday of 202.50 in intraday trading against the US dollar, below the previous close of 201.92, after the failure of talks with the International Monetary Fund (IMF).
Pakistan and the IMF have failed to reach a staff-level agreement for the revival of the $6 billion programme as the Fund emphasised the “urgency of concrete policy actions, including removing fuel and energy subsidies.”
In line with the financial pundits’ predictions, the local currency continued its downward slide following the delay in the revival of the IMF programme.
The IMF assistance has been stalled since a disagreement with the previous government over energy subsidies in late February.
Pakistan is facing a fast depletion of foreign exchange reserves and analysts have been warning that the country is at risk of defaulting on its external debts.
The mounting political unrest, after the former prime minister Imran Khan marched towards the federal capital and gave a six-day ultimatum to the govt to force early elections, shook investors’ confidence in the economy, putting pressure on the local unit.
The country needs foreign inflows to bolster its forex reserves, which have fallen to $10.2 billion, enough to meet the cost of fewer than two months of imports.