Rupee devaluation alarming for economy

Saturday, February 05, 2011

LAHORE: The result of the findings of the Jang Development Reporting Cell, after
comparing the rupee value vis-a-vis 20 other currencies of the world, including
those of South Asia, is alarming for different aspects of the national economy.

The scope of economic crisis in the country could be judged from the fact that the
value of Pakistani currency not only depreciated against the Indian rupee by 42pc
but also dropped 12pc against the currency of Bangladesh and 41pc against Nepal
during the last half decade.

According to economic experts, the continuous devaluation of Pakistani currency

also led to alarming imbalance in exports and imports of the country. Investigations
of the cell reveal that there had been 12 to 135pc depreciation in the value of the
rupee when compared with 20 strong currencies during 2000-10.

According to the State Bank statistics, the value of American dollar was Rs58.4. in
2000-01, which jumped to an average rate of Rs83.5 in nine months (July 2009 to
March 2010), thus in 10 years the rupee depreciated by 43pc against the US dollar.

The value of British Pound rose to Rs84.7 with 59pc raise. During the same period,
Euro, the collective currency of European countries, went up from Rs55 to Rs134.6,
recording a 117pc raise in value against the rupee.

The Australian dollar that climbed from Rs31.2 to 73.7pc against the rupee in a
decade attained maximum increase of 135 percent. The Canadian dollar climbed by
104pc against the rupee, from 38.4 to 78.5pc while the Chinese yen recorded 73pc
increase, making it Rs12.2 from Rs7. It may be recalled that the rupee was stronger
than the Japanese and Nepalese currencies but within a decade the Japanese yen’s
value rose by 79pc, from Rs0.51 to Rs0.91, almost on parallel footings. The value of
Nepalese currency that was lesser than the rupee has now gone higher. After
gaining 41pc, the Nepalese rupee stood at Rs1.11 from 0.78 during 2009-10.
The Indian currency also increased as compared to the Pak rupee. Gaining 42pc, it
was at Rs1.78 from the previous rate of Rs1.25. The Bangladesh Takka gained 12pc
and stood at Rs1.20 from Rs1.00.

A review of the currencies from the Muslim world speaks of 53pc appreciation of
Kuwaiti currency, 42pc each of the UAE and Saudi Riyals. The Kuwaiti Dinar rose
from Rs190.4 to Rs291.6, Saudi Riyal Rs15.5 to Rs22.2 while the UAE Dirham
Rs15.9 to Rs22.7.

Other currencies which gained against the rupee included Switzerland’s Franc
134pc, Norwegian krone 120pc, Swedish Krona 97pc, Thai Bhat 86pc, Singapore
dollar 78pc, Malaysian Ringgitt 58pc and Hong Kong dollar 44pc.