According to money central at msn, Pakistani Rupee was traded at US $68.25 today. Just around January of 2008, Rupee was quite steady at around 61 rupees to a dollar but in the past 4 months, the depreciation has been alomst 10%. That too at a time, when US dollar is also weakening as compared to other major curencies of the world. Following graph shows Rupee’s one year comparison versus the US dollar.
On May 23, 2008, ONE Unit of other currencies was equal to following number of rupees:
1 Australian Dollar = 65.64 Pakistani Rupees
1 Bangladesh Takka = 0.99 Pakistani Rupees
1 Canadian Dollar = 69.09 Pakistani Rupees
1 Chinese Yuan = 9.84 Pakistani Rupees
1 Euro = 107.73 Pakistani Rupees
1 Indian Rupee = 1.6 Pakistani Rupees
1 Iraqi Dinar = 0.06 Pakistani Rupee
1 Kuwaiti Dinar = 257.58 Pakistani Rupees
1 Saudi Rial = 18.23 Pakistani Rupees
1 Thai Baht = 2.12 Pakistani Rupees
1 UAE Dirhan = 18.61 Pakistani Rupees
1 Zimbabwe Dollar = 0.002 Pakistani Rupees
Following graph is the 5-year view of Pakistani rupee versus the US dollar. One can easily note the alarmingly sharp decline in the value of Rupee in the last few months.
Following graph shows Rupee’s sharp decline as of August 7, 2008
References:
1. Money central, msn
2. Yahoo Finance
So currently, we’re facing a dead lock. We can’t get manufacturing and exports going because there is a power problem. We can’t fix the power problem because apparently there is not enough resources. There aren’t enough resources because we aren’t getting enough funding to pay the bills and the bills aren’t being paid because manufacturing and export isn’t happening.
There are many ways to break out of a dead lock such as getting manufacturing running by cutting power else where. Or making room in the budget to get power back to where it becomes reliable. Or both things so that we can get a quick jump start.
Unfortunately, it seems as if the people who the people of Pakistan trusted to fix things are not sincere and aren’t being held accountable. They had a lot of momentum going into this government but they seem to be betraying us at every step. :(
We have the talent and resources. We just aren’t being coordinated properly it seems :(
Eidee Man, you are right. the post is kind of conclusion less. The reason is that I am not very well versed in macro-econonmics. I don’t know exactly whom to blame here. In the news I’ve read several reasons of Rupee’s fall e.g. I’ve read about speculators in money market are the reason, Pakistan’s debt repayment in dollars is the reason, political uncerainity is the reason etc. I was not able to make clear conclusion so I left the post without putting the blame on anyone.
Comments here will enlighten us on where the blame falls.
I do see the obvious, which is a sliding rupee and that is painful too see, and hence this post.
Some commentator above did write about an opportunity of using sliding rupee to enhance Exports. Good suggestion but who has the ‘basaarat’ to do that ? We’ve been bitten on this road before when an imported PM Moeen Qureshi had overnight devalued Rupee by 7 or 8% on the same notion of increasing exports but the end result was ‘wohi dhaak ke teen paat’
The comments coming here are informative. Keep them coming. They are educational for me as well as to other readers.
2007 pakistani budget was 1800 Billions of Rupee.
Taxes comming in about 1000 Billions.Defecet is 800
billions.Shortcut Aziz gave all chances to bussiness
especially foreign owned bussiness to make money and not pay a fair taxes.So the short fall in the budget was made up by printing more money
or borrowing foreign currency to make up the short fall……When the dictator took over the non-
development budget was 475 billion rupee.In 2007
budget non-development expandture was 1475
billion rupee…….No one should be surprised if
pakistani currency is sliding down word or the
prices of the commodities are going up.This ecnomic mess has been created deliberatly or these people
were incompetant…..so that in case there is change in the govt……..the ecnomic mess will be so bigger they will not be able to handle and the blame of the
ecnomic failure in the country on them.Pls. also remember the repayment of the loans or interest was postpone for 10 yrs.so that who ever people
will be running the Govt. will not be able to perform
independenly in the interest of the Country…………
beacuse they will under pressure from thoes
agencies to whom they owe money.
Owais, I think your post is missing some context.
First, the decline is even more alarming when one considers the fact that the U.S. dollar ITSELF has declined like crazy compared to the Euro and Canadian dollar during the past few years.
There are a number of possible reasons for this sharp recent decline. The consensus seems to be that the decline is mostly due not to important economic indicators, but to speculation by people who aim to profit from short-term trades. Another undeniably important reason is the sky-high price of oil. Since the cost of a barrel of oil has DOUBLED within the past year alone, it means that we’re sending out much more from our foreign currency reserves and thereby devaluing our currency.
The Shortcut Aziz government also deserves a lot of blame for the current situation. They did away with a lot of taxes and created an environment that is extremely pro-business and favors wealthy people. As of right now, we have no capital gains tax (even the U.S., with all of its emphasis on free-markets, etc has one), no solid real estate taxation system (think ridiculously expensive properties owned by a handful of people), no agricultural tax (feudal lords get richer and don’t pay a paisa), and no wealth tax which the Aziz government did away with.
Also, saying that most people don’t pay the taxes they owe is a preposterous excuse; this is the one thing that the finance department needs to go after if Pakistan’s economy is to have a half-decent chance.
Irum, what has a simple, innocent dance got to do with Thugs, Hoodlums and corrupts….. If they are enjoying a folk song why are you so jealous….