The Pakistani rupee is experiencing its worst slump in several years. Since the start of 2022, the currency has depreciated by more than 25% against the US dollar, weakening past a historic low of 239.94 to a dollar mark earlier this week.
However, the Pakistani currency is not alone in faring poorly against the greenback, with even the historically strong euro and the British pound taking a hammering and sliding against the greenback.
Of late, the fear that has gripped the financial markets and different stakeholders of the economy is that if prudent and timely economic measures are not taken, Pakistan may spiral out of control, much like Sri Lanka.
This accelerated the free fall of the rupee against the US dollar in the interbank market recently.
A report from Arif Habib Limited highlighted that the initial major depreciation of the rupee against the dollar was triggered back in April 2022, post a vote of no-confidence leading to a regime change in the country.
The associated political risks and shifting paradigms took a toll on the foreign investors’ and creditors’ confidence, hence largely contributing to putting the rupee under pressure.
In the last few weeks, the Pakistani rupee witnessed a free fall against the US dollar, depreciating over 16% since the start of the fiscal year 2022-23.
Was the rupee-dollar parity always this tumultuous?
Geo.tv takes a look at how the Pakistani currency fared since its formation in 1947.
Year | Rupee value against 1$ | Year | Rupee value against 1$ |
| 1947 | Rs3.31 | 1960 | Rs4.76 |
| 1948 | Rs3.31 | 1961 | Rs4.76 |
| 1949 | Rs3.31 | 1962 | Rs4.76 |
| 1950 | Rs3.31 | 1963 | Rs4.76 |
| 1951 | Rs3.31 | 1964 | Rs4.76 |
| 1952 | Rs3.31 | 1965 | Rs4.76 |
| 1953 | Rs3.31 | 1966 | Rs4.76 |
| 1954 | Rs3.31 | 1967 | Rs4.76 |
| 1955 | Rs3.91 | 1968 | Rs4.76 |
| 1956 | Rs4.76 | 1969 | Rs4.76 |
| 1957 | Rs4.76 | 1970 | Rs4.76 |
| 1958 | Rs4.76 | 1971 | Rs4.76 |
| 1959 | Rs4.76 | 1972 | Rs11.01 |
Year | Rupee value against 1$ | Year | Rupee value against 1$ |
| 1973 | Rs9.99 | 1986 | Rs16.65 |
| 1974 | Rs9.99 | 1987 | Rs17.4 |
| 1975 | Rs9.99 | 1988 | Rs18 |
| 1976 | Rs9.99 | 1989 | Rs20.54 |
| 1977 | Rs9.99 | 1990 | Rs21.71 |
| 1978 | Rs9.99 | 1991 | Rs23.8 |
| 1979 | Rs9.99 | 1992 | Rs4.76 |
| 1980 | Rs9.99 | 1993 | Rs25.08 |
| 1981 | Rs9.99 | 1994 | Rs28.11 |
| 1982 | Rs11.85 | 1995 | Rs30.57 |
| 1983 | Rs13.12 | 1996 | Rs31.64 |
| 1984 | Rs14.05 | 1997 | Rs36.08 |
| 1985 | Rs15.93 | 1998 | Rs41.11 |
Year | Rupee value against 1$ | Year | Rupee value against 1$ |
| 1999 | Rs51.90 | 2011 | Rs88.6 |
| 2000 | Rs51.90 | 2012 | Rs96.5 |
| 2001 | Rs63.5 | 2013 | Rs107.2 |
| 2002 | Rs60.5 | 2014 | Rs103 |
| 2003 | Rs57.75 | 2015 | Rs105.20 |
| 2004 | Rs57.8 | 2016 | Rs104.6 |
| 2005 | Rs59.7 | 2017 | Rs110.01 |
| 2006 | Rs60.4 | 2018 | Rs139 |
| 2007 | Rs60.83 | 2019 | Rs163.75 |
| 2008 | Rs81.1 | 2020 | Rs168.88 |
| 2009 | Rs84.1 | 2021 | Rs179.16 |
| 2010 | Rs85.75 | 2022 (As of July 29) | Rs239.9 |
Analyst’s take on recent rupee fall
Speaking to Geo.tv, analyst Rabeea Shahzad said that the Pakistani rupee is one of the weakest currencies this year, dropping by 25%. Countries whose currencies are following this trajectory are Sri Lanka, Ghana, Turkey and Ukraine.
“The forex reserves have dangerously dropped down and now stand at $8.5 billion during the week ended on July 22. Finance Minister Miftah Ismail recently claimed that fall in rupee is not due to economic fundamentals which is also supported by his recent tweet as he states that with the measures taken by SBP, runaway imports from last year have come under control.
“While mentioning the decline in imports he stated that ‘import number will be less than our exports plus remittances.’ He even mentioned that there is a $4 billion gap in our debt payments which would be covered comfortably by the commitments from our friendly countries (like Saudi Arabia, Qatar and UAE),” she said, sharing the developments so far.
The analyst said that in the past, Miftah’s claims of Pakistan reaching a staff level agreement with IMF “were not helpful in providing a cushion to the markets” as the agreement happened with much delay.
“Many timelines were given by the finance minister and therefore it seems his positive words are not successful in calming down the markets anymore as the rupee continues to fall against the dollar,” she said, adding that despite the positive statements given by Miftah, “speculation doesn’t seem to subside.”
Shahzad stated that as Pervez Elahi takes over Punjab, questions are raised on the survival of Prime Minister Shehbaz Sharif’s government in the Centre.
“Such political uncertainty aggravates the situation and leads to more speculation in the currency market. It also makes it hard for the government to reach out for any kind of guaranteed support from friendly countries which is now a condition put by IMF,” she told the publication.
The analyst said that one of IMF’s conditions is to let the rupee trade on its fundamentals and that it should not be controlled.
“But if there is speculation in the market then SBP and finance ministry cannot be mere spectators. It has been on a continuous fall without any intervention by SBP or finance ministry.
“It is imperative for the government to appoint an SBP governor without any delay for an effective management of the currency. However, I feel that the rupee will get a breather once we get a formal approval from the IMF board,” she concluded.
