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*Originally posted by Umer: *
When we go to Pakistan we benefit from that. But it still makes me sad, because it reflects the economic development in Pakistan as well.
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Well, lower value of rupee makes our exports more competitive. There is a reason why China doesn't delink their Yuan from the dollar - because doing that will increase the value of Yuan, and thats not what Chinese want... even though it may be an ego thing for most countries (to see their currencies gaining in value).
Having said that, I am not sure why the rupee is going down in value. May just be the pressure from exporters. Maybe something else. A better perspective is required in addition to raw numbers.
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*Originally posted by Faisal: *
Well, lower value of rupee makes our exports more competitive. There is a reason why China doesn't delink their Yuan from the dollar - because doing that will increase the value of Yuan, and thats not what Chinese want... even though it may be an ego thing for most countries (to see their currencies gaining in value).
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While some countries might make it an ego thing, I don't think that it's just that. After all the stability of a currency is mostly reflecting the stability of it's economy as well. Of course it's not the only factor and having a stable Rupee won't cause any miracles in the Pakistani economy. But at least you would have a base.
i read in THE NEWS while i was in pak 2 months ago that the pak gov delayed payment of 300 million dollars because it would make the rupee more expensive.
The euphoria after 9/11 brought some $9 billion in Pakistan in following 6 months. That boosted the KSE, the rupee value and the Pakistani economy in general. We had lots of foreign exchange in banks. Also there was tighten screening in Hundi system that encouraged ppl to trxfer their money via banks, WU and other instituations as white money.
Recently since August September this year there are lots of Mid-Eastern companies that are inviting Pakistanis to invest in UAE and other gulf countries in real estate and other sectors. There are lots of schemes that are advertised on TV in Pakistan. State Bank has estimated some $40 million are being smuggled via airports, ships and other illegal methods. Seems like ppl seeing their money more secure in UAE than in US or Pakistan. The devaluation of Rupee is because of shrinking forex reserves.
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*Originally posted by smooth_guy: *
The euphoria after 9/11 brought
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I won't exactly characterize it as "euphoria". More of an anxiety that the funds in US banks may be frozen on suspicion of terrorism, and thus these were transferred back to Pakistan and invested there.