Pakistan being a developing country its economy gets affected by the rise and fall of Pakistani Currency against Dollar. During the time of Prime Minister Shaukat Aziz in power dollar was stable for 60 rupee. When the government changed Pakistani currency immediately fell seven rupee against dollar. Since then Pakistani currency is falling and nowadays the value is 104 and the speculation is that it will keep on falling. The devaluation of currency has a direct impact on local Pakistani traders. Foreign trade such as eatable oil, raw materials, petroleum and electronics gets expensive. This creates problems for the traders. Pakistan imports 80 percent of petroleum for its consumption. According to the Former Finance Minister Dr. Salman Shah, Pakistan spends 13 billion dollar on imports of crude oil and eatable oil.
Here’s a graph showing decrease in value of a Pak Rupee against U.S Dollar from 2009-2013:
According to the specialists dollar and gold prices are compared in the world market. European countries which includes,Italy, France are now having trouble with their debt that’s why the investors has lost confidence in these countries. The investorsare investing in gold and now in dollars. The increase in the dollar value in the world market also has an affect against Pakistani currency.
Government policies also result in devaluation of the currency. Printing more money has become a common practice, the reason government is giving that they are following monetary policy it will increase job opportunity. But it is resulting in devaluation of rupee and no new jobs are being created.
Pakistan loan is another reason. IMF have a big hand in it, they force countries to devaluate their currencies against the dollar so that they can spend less and get more in that country.. maximizing the profit – pure greed. Recently government has accepted all IMF demands and it will further devaluate rupee. In next few months one dollar will be equal to 110 rupee. This was mentioned in Urdu Jang newspaper.Pakistani currency will continue to devaluate unless government takes some action.