Islamabad: Pakistan relaxed its grip on the money exchange rate to win a loan from the IMF and it caused the currency to fall to a record low Rs 255 against the US dollar.
The IMF asked the government to end its control and let the market forces determine the currency rate. Pakistan quickly accepted the condition so that it can win the global body's approval to get $6.5 billion in funding. The release of funds has been stalled this year. Pakistan's central bank also raised interest rates to a 24-year high to fight surging prices.
Pakistan's money exchange companies said they will let the local currency drop slowly in the open market and removed the limit on the dollar-rupee rate from Wednesday. This led to the currency falling by Rs 24, reported the Express Tribune.
The low forex reserve has led to massive food inflation in the country. In some regions, a packet of flour is being sold for Rs 3,000. Several videos of people fighting for food and chasing after food trucks surfaced on social media. Blackouts have also become frequent.