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How Can Pakistan’s Economy Survive A Rs 100 To A Dollar Devaluation In 11 Months?

How Can Pakistan’s Economy Survive A Rs 100 To A Dollar Devaluation In 11 Months?

 

With a sharp drop of around Rs 19 (Rs 18.89) daily, this is by far the lowest official rate. The Pakistani rupee traded in government-controlled markets between Rs 278 and Rs 281. 

 

Pakistan’s currency lost 19.2 per cent to a dollar during a single day, the second worst performance of its history. On January 26, this year, the Pakistan rupee lost Rs 25 against the dollar in a single day.

 

The Pakistan rupee started the day at Rs 230+ to a dollar, but by the evening, it stood at Rs 255 to a dollar. There was a rate of Rs 226.5 to a dollar in Pakistani markets on January 1, 2023. 

 

There have been several days where the dollar rates have been higher than Rs 300 (per dollar) in grey markets in Quetta, Karachi, and other cities. 

 

Newspapers and TV channels in Pakistan have partly blamed the high dollars for smuggling to Afghanistan. We are experiencing a severe economic crisis in Pakistan at the moment. 

How Can Pakistan's Economy Survive A Rs 100 To A Dollar Devaluation In 11 Months?

Almost every newspaper worth its salt has a column or two on sovereign defaults, like those of Sri Lanka. The Friday Times of Najam Sethi, Dawn, The News International, and The Herald Tribune have multiple reports on default risk. 

 

In addition to writing about a possible default by Pakistan, Hamid Mir of Geo TV, the most famous Pakistani journalist, has also written about it. 

 

A few Finance Minister Ishaq Dar supporters have accused the International Monetary Fund (IMF) of acting like a frontal organization of the United States in Mir’s talks. 

 

Mir further suggests that there may be some conspiracy theories in the air, including those that the IMF acts like a frontal organization of the US. 

 

The Pakistani budget for the financial year 2023 should be implemented to reduce government borrowing, resume power sector reforms, use monetary policy to reduce inflation from 20%, strengthen the social safety net and strengthen governance to stabilize the economy and bring policies in line with IMF requirements.

How Can Pakistan's Economy Survive A Rs 100 To A Dollar Devaluation In 11 Months?

It is expected that Pakistan will implement its budget during the financial year 2023 so that the government’s borrowings will decrease, power sector reform will resume, inflation will drop by 20%, the social safety net will be strengthened to reduce poverty, the governance system will be strengthened to stabilize the economy and meet IMF conditions.

 

Economics, monetary policy (such as interest rates), and cross-border trade balance tend to affect a currency’s value.

 

They determine a country’s attractiveness as a destination for investment and its currency’s growth potential. Many journalists and anchors on Pakistani TV ask economists, former ministers, and financial experts similar questions about default. 

 

The Finance Minister has repeatedly denied that Pakistan is about to default in the manner of ‘To Be or Not To Be’. Currently, Dar claims a lot of things that have proved to be false and misleading. One of the loudest voices opposing Dar’s policies is Miftah Ismail, his predecessor.

 

Dr Ismail holds a doctorate in public finance and political economy (PhD). In contrast, Dar is a chartered accountant with previous experience in finance portfolios. Okay, so what? 

 

Shaukat Tareen, the last Finance Minister of former PM Imran Khan, is a banker. Pakistan’s Finance Ministry has generally been in the hands of experts! Following Miftah’s Twitter @MiftahIsmail can be a fascinating experience. 

 

Earlier this month, he spoke at the Rotary Club of Karachi. Here, he criticizes his predecessor Shaukat Tareen for derailing the bailout package with the IMF. Pakistani Prime Minister Shehbaz Sharif has repeatedly blamed Imran for Pakistan’s financial woes. 

 

Imran’s performance during his three years and eight months as Pakistan’s PM would be interesting to see. Imran came into power in August 2018 with the blessings of establishment, and his rise is believed to have been financially backed by ISI chief Lt Gen Faiz Hameed.

How Can Pakistan's Economy Survive A Rs 100 To A Dollar Devaluation In 11 Months?

According to Maryam Nawaz, the senior leader of Pakistan Muslim League (Nawaz), Lieutenant General (retired) Faiz Hameed deserves a court martial. While serving as the DG of ISI, she claimed that Hameed supported the Imran government for four years, thus destroying Pakistan. 

 

The present Prime Minister’s niece is the daughter of former Prime Minister Mian Nawaz Sharif, who lives in self-exile in London. 

 

The PML(N) is most visible when her father is absent from Pakistan due to her virtual leader and most visible party member position. The Pakistani rupee was trading for Rs 123 per dollar when Imran became president in August 2018.

How Can Pakistan's Economy Survive A Rs 100 To A Dollar Devaluation In 11 Months?

Asad Omar, Abdul Hafeez Sheikh, Hammad Azhar, and Shaukat Tarin were Imran’s Finance Ministry ministers for less than four years as top executives.

 

A conglomeration of opposition parties ousted Imran in April 2022, when the Pakistani rupee to the dollar was nearly 182.81 (close to 183). 

 

The Pakistani rupee has fallen from Rs 182.81 to Rs 280 and has lost 100 rupees to the dollar since Imran’s ouster on April 10-11, 2022! Is there any guess about the value of the Pakistani rupee against the dollar after the first year of Shehbaz Sharif’s government ends?

Nandana Valsan
Nandana Valsan
Nandana Valsan is a Journalist/Writer by profession and an 'India Book of Records holder from Kochi, Kerala. She is pursuing MBA and specializes in Journalism and Mass Communication. She’s best known for News Writings for both small and large Web News Media, Online Publications, Freelance writing, and so on. ‘True Love: A Fantasy Bond’ is her first published write-up as a co-author and 'Paradesi Synagogue: History, Tradition & Antiquity' is her second successful write-up in a book as a co-author in the National Record Anthology. She has won Millenia 15 Most Deserving Youth Award 2022 in the category of Writer. A lot of milestones are waiting for her to achieve. Being a Writer, her passion for helping readers in all aspects of today's digital era flows through in the expert industry coverage she provides.
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