The rupee has been under pressure and is in grip of severe meltdown for the last few days, thanks to ill planned financial policies and mishandling of economic affairs by the people at the helm of affairs during the last four years. The State Bank allowed the rupee to lose 4 percent against the dollar; as a result, the rupee ended as lower as Rs 115 in the inter-bank market and Rs 119 in the open market. The rupee lost nearly 5 percent of its value to reach Rs 110.64 against greenback in December 2017 and had been struggling to stay at the level since then. However, in the recent spell, it lost another four percent, creating conditions for corrupt elements, money launders and black marketers to play with the economy at their will. Officially, the rupee lost nine percent of its value, but put the economy in dire strain on the whole. The actual foreign currency reserves have fallen to below $8 billion, the worst level as compared to the regional economies. The officials at the central bank believe the meltdown was the result of rising demand for dollars, but the idea is hard to sell to the independent financial experts as it belies the reasoning.
The reasons behind the latest the meltdown of the rupee could be the foreign loans; pressure from international financial institutions and corruption, but the government is not in a mood to ascertain the real causes behind it. The authorities are trying to create a balance in external trade and increasing volume of the current account deficit, which is adversely affecting the government ability to manage the rising import bill. The nine percent depreciation in the Pakistani rupee actually means nine percent loss in the total economy of the country. The move will open the floodgates of inflation, discourage foreign investment in the country, pave the way for capital flight and plunge the economy into the further chaos. Keeping in view the level of disinformation in the country, no one expects anything good from the devaluation strategy of the government where financial secrecy is open to everyone. The wiz-kids may have earned billions of rupees in one night in the devaluation process as transparency is worthless commodity in this country. A strong rupee is guarantee to strong economy and the government should reverse the decision of devaluation if possible. The devaluation measure will have little impact on the increase of exports, but it will definitely increase the import bill.
