Re: Dalar is now 77!
few people have discussed this topic extensively on this website.
due to structural reasons, pakistan like other developing countries like india, vietnam, turkey etc will be running a big current account deficit for the foreseeable future. current account deficit means that pakistan foreign exchange outflows will be greater than in-flows. given the size of the pakistani economy, only way this deficit can be financed is through attracting foreign investment because no govt or multilateral agency has the mandate to provide the money that pakistan needs. without foreign investment, pakistan's reserves will decline, rupee will continue to weaken and economy will contract - a pattern seen through most of 1990's. since pakistan is an import dependent economy, weakening currency will result in higher inflation independent of developments in the global economy. commodity prices in the 1990's were at very low levels and yet inflation continued to be high in pak during that period.
unfortunately for the people of pak i see no economic relief in the near future because instead of attracting foreign invetsment, govt's policy is resulting in capital flight with local investors parking their money abroad which is whats causing the currency to weaken these days.
since pakistani awam elected the current round of jokers, awam must now be willing to live with the consequences.