Pakistan’s currency hit a record low of Rs 255.43 against the dollar on Thursday as the country continues to struggle with an acute economic crisis, reported Bloomberg.

Thursday’s drop in currency value by 9.6% has been the largest single-day decline in both absolute and percentage terms since 1999, reported Dawn.

The country’s foreign exchange reserves have also dwindled to alarmingly low levels. To pay for energy imports, the country needs foreign currency, especially United States dollars.

Thursday’s development comes as Pakistan’s money exchange companies removed a price cap on the dollar-rupee exchange rate a day earlier, allowing the local currency to drop in the open market, reported Bloomberg. In Pakistan, the open market primarily consists of currency exchanges where citizens can buy and sell currency.

“Pakistan is showing its willingness and finally conceding to IMF [International Monetary Fund] demands to secure funds after a long period of reluctance,” said Naveed Vakil, chief operating officer at AKD Securities Pvt Ltd. in Karachi told Bloomberg.

The country faces the threat of debt default as the International Monetary Fund continues to delay a $6 billion (INR 48,970 crore) bailout, which was secured in 2019 under an Extended Fund Facility. The bailout was topped up with another $1 billion (INR 8,164 crore) in 2022.

Meanwhile, Pakistan has been seeking monetary assistance from countries like China, Saudi Arabia, and the United Arab Emirates.

On January 10, Saudi Arabia had said it would consider increasing the kingdom’s assistance and investments in Pakistan to $10 billion (Rs 81,763 crore) from $1 billion (Rs 8,176 crore), reported The Wall Street Journal.

Earlier this month Pakistan had announced a series of measures, including closing all malls and markets by 8.30 pm, in an attempt to conserve energy. The National Energy Conservation Plan was introduced by the Pakistani government to save the country about Rs 6,200 crore (2,273 crore Indian rupees).

Pakistan’s looming economic struggle was exacerbated by the devastating floods that displaced nearly 3.3 crore people of its 23 crore population, and destroyed crops over large tracts of land.