20:15 GMT +316 July 2019
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    Pakistan Orders Action Against Forex Firms As Currency Slides to Record Low

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    The fall in the currency has been ongoing since last Sunday’s agreement with the International Monetary Fund (IMF), in which Pakistan secured a $6 billion bailout loan.

    New Delhi (Sputnik): Pakistani Prime Minister Imran Khan has ordered action against dealers and companies selling American dollars at a higher rate, something which has been fuelling the domestic currency's slide to a record-low level. The US dollar touched an all-time high of around Rs. 148 in the interbank market.

    The prime minister has also set up a committee to control the devaluation of the domestic currency and capital flight from Pakistan.

    The committee, headed by Hafeez Sheikh, the financial adviser to the Pakistani prime minister, will decide whether the provision of carrying $10,000 by anyone travelling abroad from Pakistan can be slashed down to $3,000.

    The slide in the value of the domestic currency started after the IMF spoke of a "market determined exchange rate" in its statement on the programme on 12 May.

    "A market-determined exchange rate will help the functioning of the financial sector and contribute to a better resource allocation in the economy. The authorities are committed to strengthening the State Bank of Pakistan's operational independence and mandate", the IMF said.

    Most of the currency dealers and experts in Pakistan have already expressed disappointment over the undisclosed conditions agreed between the IMF authorities and the Imran Khan government. The slide in domestic currency will put massive pressure on inflation — reeling at around 9 percent.

    "Until the foreign exchange reserves situation improves, there is no chance of the dollar coming down", Malik Bostan, president of the Forex Association of Pakistan, told Geo News, adding that the rupee is expected to depreciate a further 15 to 20 percent against the dollar by this December.

    One in three Pakistanis believes inflation is the most pressing issue facing the country at the moment, according to a survey carried out by Gallup & Gilani Pakistan.

    According to official figures released recently, Pakistan's economy registered a dismal 3.3 percent growth in 2018-19, achieving just over 50 percent of its projected target of 6.2 percent, while the inflation rate has been hovering at over 8% for the past few months.

    Related:

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    Pakistan's Finance Minister Steps Down Amid IMF Bailout Negotiation
    Pakistan's IMF Bailout Package Inked, Other Deals to Follow - Finance Minister
    China Can Help Pakistan to Free Itself From the IMF Chains - Scholar
    Tags:
    domestic, foreign exchange, slide, investigation, currency, International Monetary Fund, Imran Khan, Pakistan
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