Finance Minister Ishaq Dar has at last bowed to the pressure from the export sector and the Pakistani rupee has appeared as the weakest against all the major currencies of the world. The rupee depreciated by 0.04 percent against the US dollar,0.89 percent against Chinese Yuan,4.62 percent against Indian rupee, 5.33 percent against Australian dollar, 0.91 against Canadian dollar, 5.3 percent against Taiwan dollar, 1.44 percent against euro and by 4.11 against Japanese yen in the third quarter of the current fiscal year. Dar had been resisting the depreciation of rupee for the last two years. According to statistical bulletin of the State Bank,the Pakistani rupee fell against all the major and regional currencies, but claimed the depreciation of rupee left positive impact in the export sector in the first quarter of 2017. Independent economists doubt any positivity as depreciation of the currency is the sign of a weak economy. It is difficult to understand how the low currency value will increase the volume of exports in the current scenario.
According to experts, a fall in the value of currency is the fall of the national economy and will have worst effects than the falling exports. The increasing volume of imports and decreasing size of exports registered a trade deficit of nearly $23 billion in the first nine months of the current fiscal year. The depreciation of the currency and an increase in exports are though positive signs for the export sector, but will have adverse effects on the economy in the long run. There are different parameters to increase exports and melting the national currency is no way in the interest of the country.
An economic disaster cannot be ruled out as ripple effects of the depreciation. The exporters had been demanding the government to depreciate the local currency by at least five percent but the finance minister had so far resisted every pressure.It happened several occasions in the past that the government depreciated the Pakistani rupee to enhance exporters, but the move fired back at the end. The rupee only rose by 0.65 percent against the Iranian rial but exports have decreased to that country. The depreciation in currency value is special case of ‘how not to make progress’ as the successive government have been doing this to the national economy during the times of their rule. It is hoped that sanity will prevail and the government will avoid further depreciation in the near future.
