After the Recent drop in the value of the pakistan rupee (USD/PKR 115.5), debate has been started that how this devaluation will effects all citizen's of Pakistan.
In this article we would focus on following key points:
1) what is /are the reason of this rise in dollar price
2) how it effects Pakistan in long term and short term
3) how it will effect Country's Loan
Its biggest impact would be "Inflation" . Over the last three months, pak rupee has devalued approx 8 to 10%. Whenever dollar price increases, it brings inflation. Currently Country Import is $55 Billion, now increase in dollar price by 7 to 8 rupees means it will increase an extra burden of Rs 400 to Rs 500 Billion over people of Pakistan.
Petrol, diesel, cooking oil, LNG, even electricity prices will go Up as they all are related to price changes in dollar. This recent increase in dollar price have put an extra burden of Rs. 15000 (average) on each family in Pakistan.
Now if we look its impact on country's loan, Pakistan has a loan of $90 Billion , experts are saying that this increase in dollar price will increase our loan payment with an extra Rs. 700 to 800 Billion.
Experts say that main reason for this devaluation of local currency is "False Currency Appreciation" done by ex finance minister (Ishaq Dar). Also, government is negotiating with IMF for loan, so that would be another reason of this increase in dollar price.
Are we expecting to have more decrease in pak rupee in coming months? well sadly, Answer is Yes. According to Some experts , it will might reach Rs 120 to 125 .