Pakistan's currency fell to a record low of 255 PKR against the US dollar on Thursday, according to local media reports. The tumble comes after the cash-strapped government relaxed its grip on the exchange rate to win much-needed loans from the International Monetary Fund (IMF).
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.
The Pakistani rupee fell by 24 PKR and was trading at 255 PKR against the US dollar at 1 pm, the Express Tribune reported.
The IMF had asked the Pak government to end its control and let market forces determine the currency rate, a condition that was readily accepted. Pakistan has been looking to win the global body's approval to get $6.5 billion in funding which is currently stalled.
While Pakistan won an IMF bailout last year, the release of funds has been stalled this year.
The low forex reserve in Pakistan has led to massive food inflation. In some parts of the country, a packet of flour is being sold for as high as 3,000 PKR. Videos of people fighting for food and chasing food trucks are doing the rounds on social media.
The country has also plunged into darkness owing to frequent blackouts.
"We haven't been able to do anything. Everybody is sitting idle. We can't operate any machines," says Zafar Ali, who runs a workshop.
Pakistan's central bank this week also raised interest rates to a 24-year high to fight surging prices.
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