Articles on the Economy currency value

Articles on the Economy currency value of PKR: Reasons and Causes of PKR Depreciation

There are numerous elements and factors that influence the determination of the exchange rate. Exchange rates are relative terms and expressed as a comparison of two currencies to each other. 

1. Differential in inflation with trading countries, low inflation rates tend to raise the value of the currency as its purchasing power increases relative to the trading partner. 

2. Differential interest rates with trading countries, interest rates, and inflation rates are highly correlated to each other.

3. Current account deficit, it shows that the country is spending more on imports than earnings from exports.

4. Public debt & term of trade, as far as public debt is concerned- governments should generate enough revenues to service their debt and foreign liabilities. 

5. Political stability. Term of trade is a ratio that shows, if the price of export increase relatively more than to prices of imports, it would be a favorable term of trade and vice-versa. 

These are the major elements that put pressure on the Pak rupee. 

In this article, I discussed the major
causes of Pak Rupee depreciation. 

For details Link-2  

Leave a Comment

Your email address will not be published. Required fields are marked *