Pakistan Economic Crisis: Country`s Rupee Records Highest 1-Day Fall in 20 Years

Pakistan is facing its worst economic crisis in two decades and has been in talks with International Monetary Funds (IMF) for bail out packages.

New Delhi: The Pakistani rupee saw its biggest one-day decline in over two decades on Thursday. The country`s currency fell 9.6 per cent against the dollar on Thursday, according to the central bank of the South Asian country. The slump was so severe that it prompted the International Monetary Fund (IMF) to resume lending to the country. The foreign exchange companies had removed a cap on the Pakistani rupee-dollar exchange rate. This was a key demand of the IMF as part of a programme of economic reforms it has agreed on with the debt-laden South Asian nation.

Federal Board of Revenue Chairman Asim Ahmed has termed the current financial situation in the country as `critical`, the Dawn reported on Friday."Economic situation [in the country] is critical and there is a shortfall in revenue. We will soon overcome the tax gap," Ahmad said during his address at a function held at the Customs House here on Thursday to mark the International Customs Day, according to Dawn.

He added that the Rs 7.47 trillion (Pakistani rupee) revenue target would be achieved since those who had not been paying tax would be brought under the tax net, the Dawn reported. It can be noted that Pakistan secured a USD 6 billion IMF bailout in 2019. After this, the loan was topped up with another USD 1 billion last year. The country was hit by devastating floods last year.

However, the lender then suspended disbursements in November last year due to the country`s failure to make more progress on its way to fiscal consolidation.

The lender announced on Thursday that it was sending a mission to the country at the end of January for discussing on the lines of resuming these disbursements.