According to reports in the local media, Pakistan's currency hit a record low against the US dollar on Thursday, at 255. The decline follows the cash-strapped government's easing of its control over the exchange rate in order to secure crucial loans from the International Monetary Fund (IMF).
Dollar-rupee rate cap abolished
The dollar-rupee rate cap was abolished by Pakistan's money exchange companies on Wednesday, and they announced they would allow the local currency to gradually depreciate in the open market.
According to the Express Tribune, the Pakistani rupee decreased by 24 and was worth 255 versus the US dollar at 1 p.m.
Pakistan wants $6.5 billion aid to be approved
The IMF's request for the Pakistani government to relinquish control and allow market forces to set the exchange rate was readily accepted. Pakistan has been attempting to convince the international organisation to approve a $6.5 billion aid package that is now on hold.
Although Pakistan received an IMF bailout last year, this year's funding distribution has been put on hold.
Massive food inflation is a result of Pakistan's limited foreign exchange reserves. A package of flour can cost as much as 3,000 rupees in some areas of the nation. Videos of people squabbling and rushing after food trucks are trending on social media.
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