Islamabad: Pakistani rupee is one of the world’s worst-performing currencies, declining by almost 12 per cent since the start of the year and more than 17 per cent after having bottomed out to 152.50 to a dollar in mid-May, local media reported on Tuesday.
Dawn reported that by the end of 2021 the Pakistan government had to once again turn to the International Monetary Fund (IMF) to put the economy into stabilisation mode.
Dawn further reported that the State Bank of Pakistan has taken numerous measures to stabilise the rupee and the Federal Investigation Agency (FIA) is continuously cracking down on hoarders and smugglers to restrict the outflow of the American currency and ease its demand, the flight of the dollar continues.
The Pakistani rupee has depreciated 30.5 per cent against the US dollar in the last three years and four months under the current government of Pakistan Prime Minister Imran Khan.
According to The News International, the value of Pakistani rupee has fallen from Rs 123 against the USD in August 2018 to Rs 177 against the USD in December 2021, a decline of 30.5 per cent over the last 40 months. This makes it one of the highest devaluations of the currency in the country’s history.
Notably, the only other higher devaluation occurred following the falling of Dhaka and Pakistan’s currency was devalued by 58 per cent from Rs 4.60 to Rs 11.10 against the USD in 1971-72.
Former economic adviser Dr Ashfaque Hassan Khan said that there was a complete breakdown of economic policymaking as the country’s fiscal policy had become subservient to monetary and exchange rate policies. He further said that the monetary tightening and exchange rate depreciation resulted in higher inflation, public debt and debt servicing, The News International reported.
Experts opine that the massive devaluation of currency under the Imran Khan government fueled inflationary pressures. They believe that the depreciation of the exchange rate by 30.5 per cent led to higher inflation, the report said.