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Pakistan Rupee Continues Freefall, Hitting All-Time Low of 270 Against US Dollar

© AFP 2023 AAMIR QURESHIA woman carries a sack of wheat flour after purchasing at government-controlled prices in Islamabad on January 10, 2023.
A woman carries a sack of wheat flour after purchasing at government-controlled prices in Islamabad on January 10, 2023. - Sputnik India, 1920, 30.01.2023
Pakistan is in the midst of an ever-worsening economic crisis with everything from wheat flour to petrol hitting record highs in recent weeks.
The Pakistan rupee weakened to a historic low of 270 against the US dollar on Monday according to figures released by the Forex Association of Pakistan (FAP).
The Pakistani currency's freefall continued on the first day of this week after the Shehbaz Sharif-led dispensation decided to remove government-monitored price capping on the USD-PKR exchange rate on Thursday.
The government's move was in line with demands made by the International Monetary Fund (IMF) before it releases a new tranche of its bail-out package to Pakistan while the economy tumbles.
On Friday, the Pakistani rupee had closed at 262.60 in the interbank market, the currency's previous all-time low. After closing at Rs 230.89 on Wednesday, the country's domestic currency has plummeted by as much as Rs 39.21 (or 14.50 percent) in the past five days.
Mohammad Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan (Ecap), blamed the rupee's record depreciation on Pakistan's lack of dollars.

"The supply of dollars has not been resumed. We do not know where the banks will get the supply from but there is no arrangement," Paracha told a local media outlet. "There is a lot of panic in the market. If dollars are received, it will cool down a bit."

The government's move to surrender its control over the exchange rate came after Pakistan's financial crisis escalated earlier this month.
Poppy field - Sputnik India, 1920, 29.01.2023
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With $3.09Bln left in foreign reserves, Pakistan has only enough dollars to sustain 18 days of imports and is in desperate need of the IMF's next tranche of $1Bln under a bail-out program to prevent the country from sovereign default.
Among the IMF's main conditions to revive the loan package to Pakistan were an end to fuel subsidies and the removal of government control on the exchange rate.
The cash-strapped country on Sunday increased the price of petroleum products to record levels with petrol costing 249.80 rupees per liter. On the other hand, people have to shell out Rs 262.80 for a liter of diesel.
Now that Pakistan has met the IMF's demands, a team from the global lender is expected to reach Islamabad on Tuesday to discuss the terms of the financial package that has been delayed for months.