The Rollercoaster Journey of the Dollar and Pakistani Rupee: From Strength to Struggle

In 1947, the journey of the Pakistani rupee began with a noteworthy exchange rate, where 1 USD was equal to 3.31 PKR. This rate was a reflection of the economic landscape at the time, positioning the Pakistani rupee as a relatively strong currency. Surprisingly, this strength persisted for eight years, maintaining its value till 1955 when it declined slightly to 4.76 PKR.

For the next 16 years, spanning Ayub Khan's and Yahya Khan's eras, the Pakistani rupee clung to its value, even surviving the tumultuous 1965 war with India. However, the turning point arrived in 1971 during the war that led to the creation of Bangladesh. As a result of the economic upheaval, the exchange rate saw a sharp rise, with 1 USD now equaling 11.01 PKR in 1972. Although it slid back to 9.99 PKR in 1973 under the Bhutto government, this marked the beginning of a more volatile era for the rupee.

From 1981 onwards, during General Zia-ul-Haq's rule, the rupee experienced a continuous decline in value. By the time Zia's reign ended in 1988, the exchange rate had almost halved, with 1 USD being equivalent to 18 PKR. The 1988-1999 decade witnessed a further deterioration, as the rupee's value plunged to 51.90 PKR for 1 USD.

This downward trajectory persisted during the Musharraf era, culminating in 2007 when 1 USD traded at a staggering 60.83 PKR. From this point, the Pakistani rupee's value began to erode rapidly. Within just 15 years, it depreciated significantly, reaching the present value of PKR 300+ for 1 USD.

The journey of the dollar and Pakistani rupee is a testament to the economic challenges and fluctuations that the country has faced over the years. While there have been periods of stability and relative strength, they have often been followed by sharp devaluations. Understanding this historical context is essential for comprehending the current economic landscape in Pakistan and the challenges faced by its currency.