Pakistan’s currency tumbled to a record low versus the greenback, a day after money exchangers lifted a cap on the dollar-rupee rate.
(Bloomberg) — Pakistan’s currency tumbled to a record low versus the greenback, a day after money exchangers lifted a cap on the dollar-rupee rate.
The rupee slid as low as 242.25 to the greenback, surpassing the previous all-time trough of 240.375 set in July, according to data compiled by Bloomberg. Owais-ul-Haq, a trader from Arif Habib Ltd.’s foreign exchange desk, said Pakistan’s currency touched 250 a dollar.
Dollar-strapped nations seeking aid from the International Monetary Fund are facing growing pressure to allow market forces to play a greater role in setting their exchange rates. In Pakistan’s case, a more market-determined currency may help it secure further aid from the multinational lender, whose disbursement of loans to the nation has seen multiple delays.
Pakistan’s money exchange companies removed the limit on the dollar-rupee rate from Wednesday, and said they will let the local currency drop slowly in the open market. Supply of dollars among onshore money-changing businesses has dried up as locals turn to the black market, with the greenback being sold at about 10% above advertised rates.
(Updates prices in second paragraph)
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