The Pakistani rupee slashed the US dollar below Rs200 as the government acted to appease the International Monetary Fund (IMF) for the revival of its loan programme.
The emboldened Pakistani rupee rocketed past the US dollar by more than two rupees as the intrabank market opened on Friday.
According to forex traders, the US dollar was now trading at Rs199.75, down Rs2.26 against the Pakistani rupee.
On Thursday afternoon, the US dollar closed the day at Rs202.01.
In order to restart its loan programme with the IMF, the government began implementing its directives on Thursday night, significantly raising the prices of petroleum products.
Late Wednesday, the International Monetary Fund (IMF) postponed the restart of Pakistan’s stalled $6 billion External Financing Facility (EFF).
As the government had hoped, the revival would bring stability to the financial markets, the rapidly weakening Pakistani rupee, and the rapidly depleting foreign exchange reserves.
Pakistan was unable to persuade the IMF despite a week of negotiations in Doha, Qatar, from May 18 to May 25.
In a statement, the Fund emphasized the elimination of petroleum and electricity subsidies, among other conditions, as a prerequisite for the program’s revival.
Following the conclusion of the talks, Nathan Porter, the IMF Mission Chief for Pakistan, stated that the Fund held constructive discussions with Pakistani officials in order to reach an agreement on policies and reforms.
“The Mission has held highly constructive discussions with Pakistani authorities in order to reach an agreement on policies and reforms that will lead to the completion of the pending seventh review of the authorities’ reform programme, which is supported by an IMF Extended Fund Facility arrangement.”
