Pakistani currency has witnessed a sharp decline against the dollar during the past couple of months. The rupee, which was standing on Rs105 about three and a half months ago, spiraled down to Rs128 on Tuesday. Currently the Pakistani Rupee is seen as the worst performing currency in the world. According to reports South Asian economies have all depreciated against the US Dollar during the last six months. However, lack of foreign investment, import in heavy trade numbers, rising Wholesale Price index (WPI), Consumer Price Index (CPI) and core inflation and forex reserves at three-year lows and increasing current account deficit are cited as the main reasons behind the steady slump in the currency. Experts believe that in countries having poor economy the continuous devaluation of currency is a multidimensional threat that on one hand affects the country’s overall economy while on the other it increases the debt burden of foreign-denominated loans when priced in the home currency. Although this is not for the first time that we are listening reports about the shrinking foreign reserves, surging debt levels, the poor economy management, mishandling of economic policy, bad governance by the men at the helm of affairs. Before 2013 we were facing similar kind of situation where the outgoing government, for obvious reasons, was held responsible for sending the country’s economy in doldrums. Later on, when PML-N government took over the reins of power there had been reports of gradual improvement in the country’s economic landscape. The country’s improving macroeconomic position has led to Moody’s upgrading Pakistan’s debt outlook to “stable”. In 2017, there were reports that Pakistan’s GDP in terms of purchasing power parity crossed $1 trillion. The former finance minister too had claimed that the Pakistan’s economy was on the right path saying that the country has become one amongst fast growing emerging economies. But the situation we are witnessing over the past couple of months is quite opposite. PML-N stalwarts stance on the matter is quite different but the fact is that over the past several decades the successive governments whether civilian or military have failed to put the country’s economy back on the rails. Rather than evolving a stable and sound economic policy they have hugely been dependent on foreign loans. Unfortunately no steps were taken to reduce the dependence upon foreign and local loans. The time has come that the people at the helm of affairs should revisit the wisdom and evolve a policy and plan to address this issue at priority basis.
