Though the Rupee saw a firm period of conversion from January 2013 till November 2017, trading around the Rs.105 to $1 mark, the poop really started to hit the fan in December 2018, continuing at a whopping conversion rate of Rs129 to $1 as of 20 July 2018. So why is this sudden train wreck not a surprise?
PKR was wayyyy too overvalued!We have evaluated the performance of PKR against its close rivals – the Turkish Lira (TRY) and the Indian Rupee (INR). After all, PKR would tend to follow international trends despite The State Bank of Pakistan’s best efforts of trying to peg it.
Between January 2013 and November 2017 PKR held its footing firm, depreciating merely 8% against USD in five years. Over the same period, TRY depreciated a monstrous 120% and the INR 18% against the USD. Moving on to the more upsetting period for PKR, from December 2017 till July 2018 PKR depreciated a further 22% against the USD with TRY and INR recording 23% and 6% fall in value respectively against USD over the same period. Overall therefore, from January 2013 to date, PKR, TRY and INR have depreciated a mammoth 33%, 170% and 25% against the USD respectively. It so stands to reason that it was only a matter of time before the State Bank of Pakistan ran out of foreign exchange reserves, or the will to peg the currency at its massively overvalued rate sooner or later.
What does the future hold for PKR? In one word – Bleak. Political uncertainty and heavy reliance on imports to fuel consumer demand at home may soon trap the currency in a downward spiral. But this information is just a teaser. You can order the FULL REPORT, with our expert opinions and forecasts for PKR, and strategies to mitigate currency risk your export and import business faces by Contacting Us. Please also include your mobile number in the message for more details. The report costs Rs.1,000/- only and payment options will be sent to you by email.
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Magic Whiteboard is a delightful new innovation in teaching, training and presentation aids. It’s a sheet of plastic charged with static electricity, so it attaches to any surface without tape or sticker, creating an instant and portable whiteboard. View our products here. The price of Magic Whiteboard will hardly ever change because we, as an organization protect ourselves against currency risks. You can learn more about these strategies and how to protect your business by ordering a copy of our FULL REPORT by Contacting Us.