Pakistan has abandoned controls on its currency exchange rate as authorities attempt to revive an IMF bailout, sending the rupee to a record low as the crisis-hit economy risks collapse. Pakistan’s central bank has in recent months enforced an unofficial exchange rate for money changers that kept the rupee artificially high, analysts say, creating a black market for currency. But traders said authorities withdrew those curbs on Thursday in order to meet an IMF demand to liberalise the exchange rate. The official banking rate ended the day nearly 10 per cent lower at Rs255 to the dollar, the central bank said.
Pakistan’s economic crisis has worsened in recent days as the country’s foreign reserves run low. Shipping containers full of imports are piling up at Pakistani ports, according to the country’s central bank, with buyers unable to secure the dollars to pay for them. Associations for airlines and foreign companies have warned they have been blocked from repatriating dollars by capital controls imposed to protect dwindling foreign reserves. Officials said factories such as textile manufacturers were closing or cutting hours to conserve energy and resources.