Pakistan rupee plunges in de facto devaluation as IMF talks loom

Reuters - The Pakistani rupee plunged about 7 percent on Tuesday (October 9) in an apparent central bank devaluation, while the stock market snapped a six-day skid after the government said it plans to seek a bailout from the International Monetary Fund (IMF). The country's fifth devaluation since December, taking rupee losses to about 26 percent, had been expected and seen as a prerequisite for another IMF rescue package. In 2013, the IMF lent Islamabad $6.7 billion. It is expected Pakistan will need a bigger sum this year to avoid a balance of payments crisis and stabilize a wobbly economy hurt by a shortage of dollars plus ballooning current account and fiscal deficits. But the IMF is likely to demand painful structural reforms that would clash with the political agenda of new Prime Minister Imran Khan, who on the campaign trail vowed to build an Islamic welfare state. Pakistan's stock market index, sliding since October 1, shot up nearly 3 percent on news Islamabad plans to seek its 13th IMF bailout since 1988. At 3pm local time (1000 GMT), the main index was 1.3 percent higher.