In the aftermath of a $6 billion bailout deal with the International Monetary Fund (IMF), the Pakistani rupee yesterday touched a lifetime low of 146.25 against the US dollar before ending the day at 144, reports Arab News.
It is believed that the PKR’s renewed decline has been caused by apprehensions that the strict conditions of the bailout package may cause a further devaluation in the currency.
The PKR’s exchange rate operates on a partial free-float mechanism; the IMF wants Pakistan to shift to a complete free float.
The president of the Forex Association of Pakistan Malik Bostan maintained that Prime Minister Imran Khan had given his assurance that devaluation of the currency had not been demanded by the IMF.
“The IMF has only demanded an exchange rate based on demand and supply,” said Bostan.
He added that the prime minister had agreed to the formation of a mechanism to try to improve the current situation regarding the exchange rate by trying to get more investments into the country.
The IMF package requires Pakistan to make improvements in the collection of tax revenues and bolstering of its forex reserves, along with the reduction of the country’s current account deficit.