Agency– The Pakistani rupee’s value against the US dollar has fallen by 30.5 per cent during the Imran Khan government’s tenure, reported local media.
This makes it one of the highest devaluations of the currency in the country’s history. The rupee witnessed massive depreciation from Rs 123 against the US dollar in August 2018 to Rs 177 against the US dollar in December 2021, a decline of 30.5 per cent over the last 40 months, reported The News International.
The Pakistani publication further said that the only other higher devaluation occurred when Dhaka fell and Pakistan’s currency was devalued by 58 per cent from Rs 4.60 to Rs 11.10 against the US dollar in 1971-72.
This recent devaluation of the currency was dictated by the IMF through prior actions, said independent economists stressing that it has nothing to do with macroeconomic fundamentals.
There was a complete breakdown of economic policymaking as Pakistan’s fiscal policy had become subservient to monetary and exchange rate policies said former economic adviser Dr Ashfaque Hassan Khan.
Emphasising that the monetary tightening and exchange rate depreciation resulted in higher inflation, public debt and debt servicing, he stressed that the empirical evidence showed that the one per cent monetary tightening hiked the inflationary pressure by 1.3 per cent in the case of Pakistan.
Pakistani currency has experienced massive depreciation against the US dollar compared to other regional currencies like the Indian Rupee and Bangladeshi Taka.
Some studies conducted by economists suggest that inflation stands at 11.5 per cent on a monthly basis, nearly two per cent comes through depreciation of the exchange rate, according to The News International.