Stories about Pak Rupee

Controlling inflation: why the State Bank of Pakistan should be autonomous

The rise in the interest rate as well as the depreciation of the rupee against the US dollar have both become topical issues in recent months. What is considered a conventional policy measure globally – often implemented in light of declining foreign currency reserves – has been scrutinised and discussed in mostly political terms. It is evident from the reaction of our political class and media that the concept of an autonomous central bank is still not fully appreciated by many. The aim of an autonomous central bank is simple: credibility. Politicians are always tempted to lower interest rates to ...

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Why is the value of the Rupee depreciating, your honour?

“Could you please explain to the committee the factors that have resulted in the sharp depreciation of the Pak Rupee recently? In addition, please enlighten the honourable members of parliament about the possible measures the government is likely to take in order to avoid this in the foreseeable future,” inquired the Chairperson of the Senate Standing Committee on Finance. This was the moment I had been waiting for since the day I started my research associate-ship in Pakistan’s Upper House of Parliament, the Senate. I was, finally, about to see the executive being held accountable by the representatives of the people. The ...

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Afghanistan needs our help!

The central bank of Afghanistan imposes a fine on shopkeepers to stop them from using foreign currency. Pakistani currency also known as Kaldhar in the war-stricken country is widely used, which reflects the lack of confidence of Afghani businessmen and traders in their economy. Afghanistan’s economy appears stable if compared to Pakistani rupee that lost almost half its value to the dollar. 90% of Afghanistan’s budget depends on foreign aid. However, will the bubble economy survive when the US is itself embroiled in a financial crisis back home? Rich Afghans are already escaping with their money stashed in suitcases. $4.6 billion has ...

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Debt and taxes: PPP’s planned loss

Elections are around the corner and the political heat is building-up. Soon there will be rallies, corner meetings and slogan chanting. Despite issues of massive magnitude, PPP’s coalition government will, hopefully, complete its term. But they might not wish to win the next general elections. The case I am trying to make is based on economic realities. Let’s analyse why. In the past four years of government, Pakistan’s economy faced tough challenges; two floods, financial mismanagement and lack of governance in all aspects of government functions, pushing the country into a deep economic crisis. Pakistan’s total public debt, which was Rs.6 trillion ...

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How the mighty dollar weakens the rupee

Money only holds value because there are goods and services available to buy with that money. It is the goods and services that create a value for that money. Coconut water would be more valuable on a treasure island than kilos of gold. In that circumstance, it’s not the value of coconut water that has increased, but the diminished value of gold that is being reflected. The fewer goods and services available, the lesser the value of money – even if it is a pile of gold. Pakistan currently produces cotton, rice, fish, fruit, vegetables, pulses and much more. These ...

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