Pakistani rupee depreciated by 30.5% under PTI govt: report

Rupee touches new record low at 170.8
Rupee touches new record low at 170.8

The Pakistani rupee’s value against the US dollar has fallen by 30.5% during the incumbent PTI-led government’s tenure, as per a report in The News.

The rupee witnessed massive depreciation from Rs123 against the US dollar in August 2018 to Rs177 against the US dollar in December 2021, over the last 40 months. This makes it one of the highest devaluations of the currency in the country’s history.

The only other higher devaluation occurred when Dhaka fell and Pakistan’s currency was devalued by 58% from Rs4.60 to Rs11.10 against the US dollar in 1971-72.

Many independent economists argue that this recent devaluation of the currency was dictated by the IMF through prior actions and it has nothing to do with macroeconomic fundamentals.

Dr Ashfaque Hassan Khan, a former economic adviser, said that there was a complete breakdown of economic policymaking as the country’s fiscal policy had become subservient to monetary and exchange rate policies. He said that the monetary tightening and exchange rate depreciation resulted in higher inflation, public debt and debt servicing. The empirical evidence showed that the 1% monetary tightening hiked the inflationary pressure by 1.3% in Pakistan’s case.

Experts say this massive devaluation of currency under the PTI government fueled inflationary pressures, adding that two major factors contributed to the price hike. First, the prices of food and commodities, as well as fuel prices, skyrocketed in the international market, and second, the depreciation of the exchange rate by 30.5% also led to higher inflation.

Some studies conducted by economists suggest that 10% devaluation of the currency raised the Consumer Price Index (CPI)-based inflation by 0.6%. As a result, the 30.5% depreciation resulted in increasing inflationary pressures by approximately 2%. This indicates that from the inflation standing at 11.5% on a monthly basis, nearly 2% comes through depreciation of the exchange rate.

An analysis of regional currencies versus the US dollar shows that the Pakistani currency experienced massive depreciation compared to others.

The Indian rupee stood at 75.39 against a US dollar. The Indian rupee stood at Rs70.09 against the US dollar in 2018, Rs73.66 in December 2019, Rs74.53 in March 2020 and Rs74.57 in April 2021.


In the case of Bangladesh, the Bangladeshi Taka stood at 85.76 against the US dollar and it hovered around 84 to 85.9 on average over the last two years.

Meanwhile, the Pakistani rupee continued to fall in value and stood at Rs177 against a US dollar in December 2021. It depreciated sharply from Rs123 against to Rs177 against a dollar over the last three years and four months


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