Pakistan’s rupee slumped more than 4% to set a new record low as authorities loosened their grip on the currency to help secure financing from the International Monetary Fund.
The rupee slid as much as 4.2% to a record 259.7148 per dollar, after a 7% drop on Thursday, according to data compiled by Bloomberg. A more market-determined currency is among the key demands for the IMF to resume its $6.5 billion bailout, which has been stalled for months.
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Prime Minister Shehbaz Sharif is battling to keep its economy afloat as power outages, dollar shortages, and political tensions threaten to sink the nation deeper into crisis. Loan negotiations scheduled for next week will give officials another opportunity to persuade the IMF to release the much-needed funds, and help rebuild the nation’s foreign-exchange reserves.
The rupee’s slide this week was triggered by the decision of Pakistan’s money exchange companies to abolish the limit on the dollar-rupee rate in the open market. Supply of dollars among onshore money-changing businesses has dried up as locals turned to the black market, as the greenback was being sold at about 10% above advertised rates.