Increase in Remittance Increase in foreign remittance can actually help stabilizing the value of Pakistani rupee against dollar in local market From raw materials to day-to-day household items, everything is produced locally in Pakistan. Therefore, buying a Pakistani product is a more economically viable option for citizens right now as it will be beneficial for the country in the long run. With the dollar price in Pakistan going above PKR 150, every imported item available in Pakistan is getting expensive gradually and steadily. Plus, if the country also stops purchasing locally produced items, it could make the survival of Pakistani industries near to impossible. Unfortunately, the Pakistani export industry is not doing well. Even in our households, if we look around, we could easily spot imported items in our use. No matter how high the US dollar price goes in the local market, the graph of demand for imported products never comes down. We have developed a habit of giving preference to imported products over local products. Help The Local Industries Of Pakistan Boycotting imported products can give a significant boost to the local industries We know the dominance of dollar isn’t going away anytime soon but the implementation of such measures could have a deep impact on the value of the dollar around the globe, especially in developing countries. Turkey has also shown great support in this concern as its government also wants to put an end to the dominance of dollars in the local markets of South Asia and the Middle East once and for all. The phenomenon of trading in local currencies was discussed at a high level meeting between Prime Minister of Pakistan Imran Khan, Chinese President Xi Jinping and President Tayyip Erdoğan of Turkey.
The use of local currencies is expected to provide some sort of relief to the economic woes in the region of South Asia. Both of these countries have plans to abandon using the US dollar while trading with each other.
Trading in Local CurrencyĪccording to a 2018 report published in Dawn Newspaper, Pakistan and China have agreed to trade in their local currencies: rupee and yuan. Be it on the state or individual level, with the help of certain measures, this rapid surge in US dollar value in Pakistan might be slowed down. Measures That Can Be Taken to Bring down the US dollar Rate in Pakistan There are certain measures that can effectively bring down US Dollar rate in Pakistanĭespite all the aforementioned factors, it’s not all doom and gloom. Just in May 2019, the dollar went up by almost PKR 10 rupees and reached an all-time high of PKR 154.2. Widening trade deficit and increasing pressure of the funds borrowed from the World Bank and the IMF are some of the main reasons why the US dollar is gaining strength against Pakistani rupee day by day, almost literally.
In 2012, the US dollar reached its record high price in Pakistan’s open market as it crossed the mark of PKR 100. The surge continued in the following years. Multiple factors such as global war on terrorism, political instability in the region and decreasing imports at that time had caused the rate of dollar to go further up and in the mid 2000s it was at around PKR 60. The chart above shows you the lowest dollar price in Pakistan, over the past two decades, of around PKR 52, which was in 2000. There has been a significant surge in the value of the dollar against the Pakistani rupee over the course of the last 20 years Dollar rate in Pakistan has shown a significant increase in the last two decades It is a global currency that is used in international trade between Pakistan and rest of the world. The US dollar is one of the top performing currencies in the world. Rising Dollar Rate in Pakistan Since 2000 Have a look at the chart below showing a gradual but substantial increase in dollar rate since 2000. The rate of dollar in Pakistani market has been continually rising for the last two decades. Was the dollar price in Pakistan always above PKR 150? Of course, not. Rise of imports, decreasing remittance and, most importantly, the agreement on the terms laid down by the International Monetary Fund (IMF) are constantly devaluing the local currency against the dollar. But before you start weighing in on the subject with a colleague at the office or your workout buddy at the gym, remember that there are various factors behind the increasing dollar value against the Pakistani rupee. The increasing US dollar rate in Pakistan has left everyone, for lack of a better word, astonished.
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