Do you remember an old adage:
‘ye cheez to Takkay ki nahiN hai’ (This thing is not worth a Takka).
Well, today the tables have turned. What was once true of BD Takka is now true for a Pakistani Rupee. As of today 1 Bangladeshi Takka equals 1.14 Pakistani Rupees . The phenomenal slide of Pakistani Rupee, which started around January 2008 continues unabated. Pakistani rupee is now trading at very close to 80 Rupees to a US dollar. Yahoo Finance was quoting Pakistani rupee at Rs 78.375 to a US dollar on October 6, 2008.
We also had a post on this topic back in May 25, 2008 when Rupee had slid down to Rs 68 for a dollar but this time slide in Rupee’s value seems like the steepest in history of Pakistan. Rupee has lost almost one third of its value in the past 10 months.
The question that everyone is asking is whether current Government is capable of controlling this situation or is it beyond anybody’s control.
Pakistan’s finance Minister (since May 12, 2008) is Mr. Naveed Qamar and atleast I’ve not heard anything from him about what are Government’s plans to bolster Rupee’s value or to stop fast depleting foreign exchange reserves of Pakistan (now down to approx $8.1 bn).
What is happening to a common person among all this turmoil is depicted well in a sher by Anwar Masood.
“jo dil pe guzarti hai raqam karte raheN ge”
kal tum ko bata deN ge raqam kitni bani hai
Reference:
– Owais Mughal Sahib,
Not being an economist either but a concerned Pakistani like you, Adil and others in this forum.
Just the feeling of being a little ‘whiter’ than our brother Bangladeshis led us to our break up. The Taka has been quite strong past many years.
Aqil and Sajjad Sahib have very aptly put the situation in its proper perspective and we must not forget what pakistaniat.com is all about.
We should respond/react as Pakistanis and Pakistanis only.
No need to panic, as Aali Ji once said—
— utho ahle watan , hub’bay watan ki aazmaish hai,
–diloan ki, tan, man dhan ki aazmaish hai–
Sincerely
Naseer
HaHaHaHaHa!!
I am laughing at all those champions of democracy and their supporters who wanted Musharaf and PML out. For eight years dollar was at Rs60-Rs62, we did not have any issue of wheat, nor electricity. The previous government somehow managed it despite western boycott when musharaf took power, pakistan india confrontation, the earthquak disaster and the 2003 markets crash.
The lawyer movement is another joke, the lawyers and judiciary has been used like a prostitute by the power hungry politicians. Why arent people protesting now? Look what our president said yesterday, ‘The freedom fighters in kashmir are terrorists’. We should all be ashamed of having Mr.10% who is declared mentaly unstable by his own doctors from new york as president.
Pakistan will soon be a failed state, dollar will bounce to 600Rs, people will be looting each other and it will be worse then afganistan & sudan. India and israel will use the opportunity to attack on our nuclear facilities.
Pakistaniat.com is so bias why arent you criticising the current government!!!
First ‘Aziz’ and now ‘Tareen’. When our govt. will understand that a good banker is not necessarily a good economist.
And why not Mr. Nasir Hussain, the current husband of Ms. Sherry Rehman. He is also president of some bank / financial institution??
Shaukat Tareen gets top finance position. Following news appears in Dawn of Oct 8, 2008
ISLAMABAD, Oct 7: The government has decided to appoint senior banker Shaukat Tareen as the prime minister
The exchange rate is determined by the supply and demand of the currencies. So if the country runs a huge trade deficit (imports – exports), then its currency is bound to fall. Unless it has some other source of foreign exchange that is. In the post-911 situation, Pakistan has lately been receiving $5-6b of anual remitances from abroad. This means that we can run a trade deficit of $5-6 b without getting into trouble. If we are receiving some foreign aid (not loans), that gives us an extra cushion. But if our trade deficit swells even beyond that, then we are bound to take a hit.
Pakistan’s trade deficit has been rising for quite some time now. In 2005-6, we had a current account deficit of $4.490 billion (the current account deficit is obtained after including foreign remitances). In 2006-7, this rose to $7.016 billion. The only reason why the rupee did not fall then was that we received foreign investment of about $7b or so that year, which covered our current account deficit. This was not a good thing since it meant covering current consumption with foreign investment.
In 2007-8, the trade deficit soared to around $20b and even after including the foreign remitances the current account deficit came to a wapping figure of about $14b. This much we could not cover even with foreign investment, which (as mentioned earlier) is an unhealthy and unsustainable thing to do anyway.
In short, it should not be surprising that the rupee has taken a sudden hit.
We should have started worrying about this problem at least as far back as 2005-6 but Shortcut Aziz and co used to boast that our economy is on a sustainable track even in 2007. The business community used to express the same kind of optimism. People who supported Mush and Shortcut wouldn’t and still don’t want to hear any criticism of their economic mismanagement or at least refute it with proper reasoning.
And about the PPP and PML-N, the less said the better. All they did over the years was to run a single track campaign for ousting Mush and getting their exiled leaders back, and did no homework on how they would address the problems of the country once they returned to power. Now, the government is relying on a foreign bail out package, which would naturally come with strings and again, the amount we get is unlikely to be used wisely.
Over the years, we did not push for manifesto oriented and issue based politics and discourse. If one loved Mush, everything his govt did was good; if one disliked him, everything he did was bad; if one wanted democracy, one ignored the flaws of BB and NS; if one was a jiala, all one did was to raise empty slogans about the ‘sacrifices’ of the party and the Bhutto slogan and likewise for the supporters of other parties.
Now we are going to pay a price for it.