[dropcap]M[/dropcap]any economists revealed that exchange rate instability has direct relations on macroeconomic indicators and thus on economic presentation of any state. Basically exchange rate is the price of one currency in relation to another currency. It is said that most of the states impose constraints on exchange rate instability to manage instability of the local currency. The grate fluctuation in the exchange rate may be created by unforeseen monetary shocks in any state. Attempts are made to attain economic progress and price stability, by the economic advisors, because the exchange rate instability is connected with the impulsive movements in comparative price economy. Previously, the Pakistani rupee was pegged to the British pound until 1982, when the Government of Pakistan altered it to managed float. As a consequence, the rupee devalued by 38.5 percent between 1982 to 1983 and 1987 to 1988 and the cost of enhancing raw materials rose quickly.
The State Bank of Pakistan (SBP) stabilizes the exchange rate by lessening policy rates and buying dollars, in order to preserve Pakistan’s export competitiveness. The year 2008 was termed a disastrous year for the rupee after the elections and until August 2008 it had lost 23 percent of its value since December 2007 to a register low of 79.2 against the US dollar. The main causes for this depreciation, a huge current and trade accounts deficits, had been built up since the credit boom in Pakistan post 2002.
Because of bad law and order situation in the FATA and NWFP regions, foreign direct investment (FDI) started to decline and structural issues of BoP (balance of payment) where exposed; a catastrophic condition happened where forex reserves declined to as low as $2 billion. However, by February 2011 forex reserves had recovered and set a new record of 17 billion dollar. Of that 17 billion dollar, greater than 10 billion dollar was borrowed money with interest applicable. During February 2016, it is calculated that Pakistani rupee was Rs104.66 against US dollar and, in June 2017 it is recorded Rs106.3 against US dollar.
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US $ VS PKR EXCHANGE RATES
|
|
|---|---|
|
Year
|
PKR
|
|
1948
|
3.3085
|
|
1949
|
3.3085
|
|
1950
|
3.3085
|
|
1960
|
4.7619
|
|
1970
|
4.7619
|
|
1980
|
9.9
|
|
1990
|
21.7074
|
|
2000
|
53.6482
|
|
2010
|
85.1938
|
|
2017
|
106.3
|
Presently there are multiple exchanges companies offering services in the country, the main companies such as Dollar East Company, H&H Exchange Company, Money Link Exchange Company, WallStreet Exchange Company and PBS Exchange Company.
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DOLLAR EAST EXCHANGE COMPANY
In Pakistan, Dollar East Exchange Company (Pvt) Ltd is a leading exchange company and was amongst the first firms to attain the license of money changer from SBP when this business was regularized during 1992. Presently Dollar East is authorized to contract in the business of currency exchange and inward/outward remittances in a regulated environment. Dollar East presently operates a network of 37 branches which are strategically placed in all high potential regions.
H & H EXCHANGE COMPANY
H&H Exchange Co (Pvt) Ltd is without any doubt one of the famous exchange firms in Pakistan with strong financial and professional managers. With the integrity and ethical behavior, H&H Exchange has made an extraordinary progress and achieved a strong credibility in the foreign exchange market of Pakistan. This ongoing attainment is consequence of professional expertise, focus on systems and capitalization, research and most important is responsiveness to every aspect of their customer requirements.
MONEY LINK EXCHANGE COMPANY
Money Link Exchange Company (Pvt.) Ltd is also one of the pioneers in currency exchange business through out Pakistan. Money Link contracts in bank drafts and inward/outward remittances and international currencies in a regulated environment under the exchange company license of SBP. The management understands the significance of the economic stability of Pakistan and in future it is believed that the management will always work for the betterment of the economy with respect to its service and innovative marketing strategies.
WALLSTREET EXCHANGE COMPANY
Wall Street Exchange Company (Pvt) Ltd has been managed by the professional expertise in the country. Wall Street believes in complete institutionalization of business, and therefore it has strong mid tier management, which takes care of operations, regulatory aspects and marketing. The Company commenced its operations during December 2003, as per the principles laid down by SBP.
PBS EXCHANGE COMPANY
Presently, PBS Exchange Company (Pvt) Ltd enjoys diversity in its network which includes franchises, branches, and payment booth. PBS Exchange’s network is spread out in the entire country concentrating and covering all main cities and suburbs. PBS Exchange is a project of STHN group. Their leadership and strategic techniques have taken the company to one of the leading exchange company in Pakistan.