Pakistan’s Economy: A Big Crisis! Petrol Rs. 249 Per Litre; Even Currency In Free Fall
Pakistan’s economic crisis: The people of India’s neighboring country Pakistan, which is facing perhaps the worst economic crisis since its existence, is now struggling with high prices of petrol and diesel.
Pakistan government on Sunday increased petrol and diesel prices by Rs. 35 was increased. Now petrol in the country is Rs. 249 per liter and diesel at Rs. 228 per liter is sold.
Adding to Pakistan’s economic woes, its currency is in free fall. In the last four days, the Pakistani currency has fallen by Rs 35 against the US dollar. Currently, the value of Pakistani rupee is 250 against the US dollar.
Pakistani rupee hits 20-year low
The currency witnessed its biggest one-day fall in two decades on Friday after the government eased its grip on the currency to secure fresh loans from the International Monetary Fund (IMF).
The country’s money exchange companies removed the dollar-rupee rate cap effective January 25 to allow the local currency to gradually depreciate in the open market.
Pakistan has suffered the worst economic crisis in decades, grappling with high inflation, low GDP growth and dwindling forex reserves.
The country is desperately seeking funding from the IMF to avoid default but the international monetary agency has demanded some concrete reforms, including a hike in petroleum prices.
Pakistan is left with foreign exchange reserves of only US$ 3.5 billion, which can cover only three weeks of imports.
It desperately needs the IMF to release the next USD 1 billion tranche to guard against a possible default.
The government of Pakistan is planning some drastic measures, including cutting the salaries of central employees, reducing the number of federal ministers and curbing the expenditure of ministries.
Pakistan’s Prime Minister Shehbaz Sharif has also constituted a National Austerity Committee (NAC) to suggest ways to reduce the expenditure of various departments.
According to local media reports, the committee has proposed a 10 percent cut in the salaries of government employees and a 15 percent cut in the expenditure of ministries and departments.
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