To start a discussion on a specific topic such as the Devaluation of the Dollar in Pakistan or to examine the exact factors we have to go behind the times, travel a little or more back in the timeline to know exactly what happened, and what caused the difference of the state of any given thing. Observations play a vital role to steer anything towards betterment or to defy and counter the loss an object creates. The rise and fall of the Dollar, however, seems to remain out of bounds to all the observations and measures taken by our Government and state institutes to control it.
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Pakistan is the center of attention around the world regarding what is happening and what has been happening in the past 70 years. Starting with the issue of Kashmir right after its independence, then the attack of the Soviet Union on Afghanistan, followed by martial law governments, terrorism, the making of Nuclear warheads, and the present war ongoing nationwide and globally, Pakistan stays vital and vulnerable simultaneously. When a war is waged or any kind of political instability occurs the nation suffers a very long-lasting dire loss which is almost impossible to recover.
The dollar is used as a trade currency all over the world; for imports, exports, for major deals between two people or nations, and as a reserve fund by most countries, so yes, the dollar is the most important currency all over the world. Pakistan is under a huge debt after taking direct loans from IMF and ADB, infrastructural-based loans, project-based loans, and others to help from friendly countries to keep stable. This, however, has put the country and the nation under serious monetary issues causing inflation in the markets, corruption due to a rise in the cost of daily use, and a huge class difference in the urban areas.
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Why does the devaluation dollar in Pakistan occurs?
In 2008, ten years ago, the US Dollar stood at Rs. 67.5/-. This was the selling rate in the open market. In just a span of ten years, it has gone almost double and the market stands at an average rate of RS. 177/- to a Dollar. This is quite alarming. The government needs to stop taking more loans and control ongoing money laundering to stop the Devaluation of dollars in Pakistan.
Money laundering is a process of smuggling amounts of money outside one country and then transacting it as many times as possible through different accounts and borders to eradicate any trace and trail of the amount being smuggled. There is a loophole in the laws of Pakistan and International laws that gives a window to the person or the organization involved.
A handsome amount taken in as a bribe or looted is transferred to a fake account which clearly depicts the level of white-collar crime and corruption in Pakistan. This amount is then withdrawn, and the dollar is bought from the open market, also referred to as the black market because no identity is required for the purchase, nor is the purpose asked.
The dollar is later again deposited in a “fake” foreign currency account and then transferred abroad. This devalues the Dollar as the currency gets shortened in the market and the price shoots up.
Another factor is our increasing imports and decreasing exports. This is quite alarming and dangerous for our economy. We are relying more and more on imported items and thus the imports are increasing, yet again making the Dollar weak against the Pakistani Rupees as Pakistan fails to gain inwards remittances.
The Government and the nation of Pakistan as a whole should think over this and take necessary measures to stop the devaluation of the Pak Rupee against the US Dollar or else the economy may deflate more and the country would dive deeper into crisis.
Yes, Dollar is connected to our daily life as it affects and has a major effect on the prices of almost everything we purchase, our living standards, and the dignity of the nation in the world.
Let us hope that there would be betterment in the future as economic instability gives birth to almost every bad thing possible.
