Post IMF bailout, Pakistan's currency reaches all-time low against US dollar

File photo: Pakistani rupee Photograph:( AFP )

WION Web Team New Delhi, Delhi, India May 16, 2019, 09.27 PM (IST)

Pakistan's currency plunged to a new all-time low against the US dollar on Thursday after the government last week reached a preliminary agreement with the International Monetary Fund for $6 billion bailout.

The Pakistani rupee slipped 3.1 per cent to 147 rupees a dollar on Thursday morning in another all-time low for the second consecutive day.

The rupee was trading at 141.5 on Wednesday, prompting country's Prime Minister Imran Khan to set up a committee to control the devaluation of the local currency.

According to a report by local media, there is speculation that it may slide further.

Pakistan and the IMF on Sunday had reached a new agreement securing a $6 billion bailout for the cash-strapped country, following months of painstaking negotiations between the two sides. The deal still needs approval from the IMF board in Washington.

For more than a year now Pakistan has struggled to stave off a looming balance-of-payments crisis while its economy teeters due to low growth, soaring inflation, and mounting debt.

Discontent is already growing over measures the government has taken in the last year to fend off the crisis, including devaluing the rupee by some 30 percent since January 2018, sending inflation to five-year highs.

Analysts had warned that any fresh IMF deal would likely come with myriad restrictions that could hobble Imran Khan's promise to build an Islamic welfare state, as the country is forced to tighten its purse strings.

Pakistan has had 21 bailouts since it joined the IMF in 1950. Its most recent loan was issued in 2013, worth $6.6 billion.

(With inputs from agencies)

Story highlights

The Pakistani rupee slipped 3.1 per cent to 147 rupees a dollar on Thursday morning in another all-time high for the second consecutive day.