Pakistan forex, also known as the Pakistani rupee, is the official currency of Pakistan. It is issued by the State Bank of Pakistan, which is the central bank of the country. The currency is denoted by the symbol Rs and the code PKR. The Pakistani rupee has been in circulation since 1947, when Pakistan gained independence from British India. In this article, we will discuss the history of Pakistan forex and how its value has fluctuated over time.
The early years
When Pakistan gained independence in 1947, the Indian rupee was the official currency of both India and Pakistan. However, in 1948, Pakistan decided to introduce its own currency to establish its economic independence. The first Pakistani rupee was issued in 1948, with a value of 1 Pakistani rupee to 1 Indian rupee. However, the value of the Pakistani rupee gradually declined over the next few years, and by 1955, it was worth only 0.77 Indian rupees.
The devaluation of 1955
In 1955, Pakistan experienced a significant devaluation of its currency. The government of Pakistan decided to devalue the Pakistani rupee by 36.5%, which meant that the value of the rupee decreased from 4.76 to 3.01 against the US dollar. This devaluation was necessary because Pakistan was facing a balance of payments crisis, and it needed to make its exports more competitive in the global market.
The 1970s
In the 1970s, Pakistan forex experienced significant fluctuations due to political instability and economic mismanagement. In 1971, Pakistan lost its eastern wing, which became the independent country of Bangladesh. This led to a significant loss of revenue for Pakistan, and the value of the Pakistani rupee declined sharply.
In 1972, the government of Pakistan nationalized all banks and financial institutions in the country. This led to a decrease in private investment, and the country’s balance of payments position deteriorated. As a result, the value of the Pakistani rupee continued to decline.
The 1990s
In the 1990s, Pakistan implemented a series of economic reforms that helped stabilize its economy and strengthen its currency. In 1991, Pakistan joined the International Monetary Fund (IMF) and implemented a series of structural reforms to improve its balance of payments position. The government also liberalized the economy, which led to an increase in private investment.
As a result of these reforms, the value of the Pakistani rupee increased significantly. In 1994, the exchange rate was 26.5 Pakistani rupees to 1 US dollar. By 1998, it had strengthened to 44.25 Pakistani rupees to 1 US dollar.
The 2000s
In the 2000s, Pakistan forex continued to fluctuate due to a number of factors, including political instability, terrorism, and natural disasters. In 2001, the 9/11 attacks in the US led to an increase in terrorism in Pakistan, which negatively affected the country’s economy. In 2005, a major earthquake hit Pakistan, causing significant damage to the country’s infrastructure.
Despite these challenges, the Pakistani government continued to implement economic reforms to strengthen the country’s economy. In 2008, Pakistan entered into an IMF loan program, which helped stabilize the country’s balance of payments position. As a result, the value of the Pakistani rupee remained relatively stable during the 2000s.
Recent developments
In recent years, Pakistan forex has experienced significant fluctuations due to a number of factors, including political instability, economic mismanagement, and the COVID-19 pandemic. In 2018, Pakistan experienced a balance of payments crisis, which led to a significant devaluation of the Pakistani rupee. In just one year, the value of the Pakistani rupee declined from 105 to 160 against the US dollar.
In 2020, the COVID-19 pandemic led to a global economic downturn, which negatively affected Pakistan’s economy. The government of Pakistan has implemented a number of measures to mitigate the economic impact of the pandemic, including a stimulus package and debt relief for businesses. However, the value of the Pakistani rupee has continued to decline, and as of August 2021, it is worth approximately 163 Pakistani rupees to 1 US dollar.
Conclusion
Pakistan forex has experienced significant fluctuations over the past 70 years, due to a number of factors including political instability, economic mismanagement, and global economic trends. Despite these challenges, the Pakistani government has implemented a number of economic reforms to strengthen the country’s economy and stabilize its currency. However, the future of Pakistan forex remains uncertain, as the country continues to face economic and political challenges.
