Currency devaluation depicts poor performance of a country and its economic downturn. It is an alarming situation in Pakistan as PKR is showing a devaluing trend from the past few years. The value of PKR has fallen to a great extent in the past years.
An alarming devaluation is seen in the past four years from Rs121 to close to Rs200. The abysmal state of Pakistan’s economy is facing adverse effects from depreciation in PKR. Currency devaluation is a bad indicator and makes it difficult to meet foreign debt obligations as more rupees are equal to a dollar. It reduces the cost of a country’s exports, rendering them more uncompetitive in the global market, which, in turn, increases the cost of imports leading to inflation which is a huge pressure for Pakistani citizens as they are already struggling enough to manage day-to-day expenses.
High rate of returns can make foreign investors invest their money in Pakistan which will increase the demand for Pakistan’s currency. Importing less and exporting more can help by positioning local brands in consumer’s minds. It can make more out of its agricultural sector which will play a role in increasing the country’s exports. Pakistan is an oil importing country and rising oil prices is a burden so we should identify cheap alternatives.
Today’s world is the world of technology and many countries are on the pinnacle of success due to their increased efforts in tech sectors. Tech based businesses will help in building Pakistan’s economy. Government can support people with extraordinary entrepreneurial ideas by lending them money or by partnering with them by paying them a reasonable salary till the investment starts paying off. We should work together in growing as a nation.
By: Rimsha Arshad