Pakistani Rupee Hits Record Low as Flood-Struck Nation Awaits Billions in Foreign Aid

Pakistan Prime Minister Shehbaz Sharif said on Monday that he would urge the global community to spare “immediate attention” towards his country as he embarked on a visit to the US to attend the UN General Assembly this week. Islamabad has requested billions in foreign aid to recoup economic losses from floods.

Pakistan’s national currency hit a multi-decade low of 243 Pakistani rupees per US dollar in the inter-bank market on Monday, before closing at just under 240 Pakistani rupees (PKR).

The last time the Pakistani rupee breached the 240-mark vis-a-vis the US dollar was in July, almost two weeks after the government struck a $1.1 billion deal under an Extended Financing Facility (EFF) with the International Monetary Fund (IMF).

The current instance marks the worst performance of the national currency since 1975, as per media reports.

In an interview with Reuters on Monday, Finance Minister Miftah Ismail noted that the country was awaiting $4 billion for budgetary and other financial support from the Asian Development Bank (ADB), Asian Infrastructure Investment Bank, and the World Bank. He said that around $1.5 billion was expected to be disbursed to Islamabad next month from the ADB as a "countercyclical support facility".

Ismail also said that around $5 billion in pledged investments were awaited from Qatar, the United Arab Emirates (UAE) and Saudi Arabia in the current financial year, which would end in June 2023.

The finance minister exuded confidence that once the external payments started to flow in, the current market would stabilize.

The Pakistani economy has been witnessing one of its worst downturns in living memory amid a global spike in fuel and food prices, owing to the Western sanctions against Russia.

The country's economy has been grappling with depleting foreign reserves and unprecedented inflation, which reached a record of 27.3 percent last month as the government cut subsidies to fuel.

The government has warned that the devastating floods have further inundated large swathes of agricultural land which will further exacerbate food shortages.

The potential damage to the Pakistani economy owing to the floods, which have affected over three million people, could reach $30 billion, according to officials.