In the year 1947, a new country became a new country Pakistan. The currencies of India and Pakistan were the same then. That is, 1 Indian rupee = 1 was a Pakistani rupee. Then anyone would hardly have thought that this balance of both currencies over time will deteriorate so fast and with such a huge difference. Actually, there has been a lot of difference between the currencies of both countries today. Today the situation is completely different. The price of 1 Indian rupee has become about 3.22 Pakistani rupee.
But how did this happen?
Have you ever thought that how did the currency of India and Pakistan become so different today? What were the decisions, crisis and circumstances, which gave a completely different turn to the economic direction of both countries? It is not just a matter of currency or exchange rate, but it is a result of history, policies and people’s thinking. To understand this, let’s go a little in the past. According to Laxmiiforex, the foundation of the currency system of India and Pakistan was based on the British Indian currency system. After the partition, Pakistan did not immediately release its own money.
For the first few months of independence, Pakistan used the Indian currency, which was approved by the Government of Pakistan. After some time, Pakistan officially introduced its own currency Pakistani rupee i.e. PKR. This step was the first major change towards establishing its economic identity for Pakistan. But from here, the economic paths of both countries started to vary.
Why did Pakistani rupee become weak in front of Indian rupee
The economic routes of both countries have become different
After 1947, both India and Pakistan had big dreams, but the ways to get them were quite different. India insisted on creating a diverse economy from agriculture to heavy industry and later on IT and service sector. After the 1991 economic reforms, India opened its doors to the global market, attracted foreign investment and strengthened exports. With these efforts, the situation of Indian rupee became stronger.
Ever since the partition in Pakistan, problems like political instability and repeated changing government have arisen. Due to this, no long -term economic policy could be made there. Industries could not be encouraged, Pakistan often started depending on foreign help and debt which made the economy more weak in the long run.
Pakistan gets caught in debt trap
Pakistan and Pakistan have the attitude of frequent debt of Pakistan, one of the biggest reason for increasing the distance between India and Pakistan. Pakistan took loans from the International Monetary Fund several times to deal with the economic crisis. But you know that debt proves to be an obstacle in the way, because you also have to pay interest. Pakistan went on doing the same.
India also took loans in the past, but since the 1990s, India worked towards reducing debt dependence and focused on economic growth through production, export and foreign investment. This change helped to keep the Indian rupee stable, while the Pakistani rupee continued to fall.
Falling strength of inflation and currency
Inflation means increase in prices of goods and services over time. If there is continuous inflation in a country, then the purchase capacity of his currency decreases. In Pakistan, the prices of basic things have increased very fast in the last few decades, which has weakened the international and domestic strength of the currency there. There has also been inflation in India, but in the last few decades it has been controlled to a large extent. Because of this, the Indian rupee does not lose its value as fast as the Pakistani rupee.
Latest business news
