Pakistani currency has seen major ups and downs in its history and these ups and downs have always been substantial enough to not go unnoticed. This volatility in the Pakistani rupee has been the result of massive to minor reasons and the devaluation always had its adverse effect to the country. Last year around the same time the currency of Pakistan plunged down the most in its latest nine years of history after the Central bank of the country was said to have devalued the currency. This came as the result of foreseeing major signs of stress in the second largest economy of South Asia due to the elections that will happen this year.
in 2016, the International Monetary Fund made it clear that the currency of Pakistan which was operating under a managed float regime was affecting its exports in a negative perspective. At that time it was valued at 20 percent. Last year Khurram Dastgir, Pakistan’s Commerce Minister, suggested that the value of rupee should be adjusted after the devaluation of currencies by regional players around Pakistan such as China, Turkey, Thailand, and India.
Pakistan broke its own record with a ‘Massive’ devaluation in its currency
But this time around, the decrease down in the value of Pakistani currency has made a record by stooping down the lowest in its 70-year history as reported by the Khaleej Times.
The devaluation of the country began earlier this year and it just kept on slumping down to a record-breaking low against the UAE Dirham on Wednesday. However, the government did not make any interventions to arrest the slide of the currency this time around as well. The inevitable effects that this low down in the currency is going to bring in to the country and its economy is insufferable by the country at this point in time.
By making a major decrease and hitting 33.11 against the Emirati currency, Pakistani rupee has said to have broken its own record of its previous 70 years in about only a span of 10 days. It has lost about three percent or one rupee against the dirham in past 10 days.
PKR’s devaluation was predicted
As per the news reported by the UAE newspaper, Khaleej Times, an economic analyst has predicted a further decrease in the Pakistani rupee due to a number of issues that the country has up its sleeve. The reasons may be the political instability in the country due to the elections that are to come in the late of July, the balance of payment, the shortage of dollar and falling forex as well. The analyst had very accurately predicted that the currency of Pakistan will stoop down to 33 before the arrival of its next sitting government.
State Bank of Pakistan to watch PKR slide
The central bank of Pakistan, State Bank, has decided to keep itself on the sideline and continue watching the continuous sliding down of the rupee which is a hint towards the devaluation of the currency. The currency saw its 3rd devaluation on the 11th of June in about last seven months. The previous devaluation was seen in December 2017 and March 2018 which was observed by 5 percent.
President of Karachi Chamber of Commerce and Industry is persisted Government to arrest the slide in the currency
The president of Karachi Chamber of Commerce and Industry, Muffasar Atta Malik, has been reportedly urging the government to arrest the slide in the currency as it has gone 122 against the US dollar. He has also been persistently warning the government that this decline would bring devastating situation on the economy which is always under deep water and the decline in the country will bring about added economic depression which will last for several years to come
While giving an interview to Khaleej Times, the Chief Operating Officer at Xpress Money, Sudhesh Giriyan said, “It is an orchestrated devaluation move by the government because, under normal circumstances, you don’t see such large depreciation. The rupee today went past 32 marks against UAE dirham today and it looks like it will go down further”
Future Predictions of even greater sinking
The conditions at hand are already not in their best forms and there are being made further bad predictions about the Pakistani currency. Mr. Rajiv Raipancholia who is the CEO of Orient Exchange has forecasted a further weakness in the rupee which is going to hit soon by the year 2020. As his predictions, the rupee will go further down to 38 against Emarati dirham in 2 years which is indeed a major point of concern for the government that is going to be elected next.
As per the analysis of professionals, it is said that it will become very difficult for Pakistan to set up the value of its currency if the country even tries to do so. At this point in time, Pakistan has to sort things out in the former ways that are to print money when no one is willing to lend.