Rupee's Decline Linked to Inflation, Productive Capacity, Global Pressures

Pakistan's rupee has been experiencing a long-term decline against the US Dollar, according to Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial. The chairman attributes this decline to three major factors: domestic inflation, limited productive and export capacity, and external global pressures.

Langrial explained that when domestic prices rise faster than those in other countries, currencies tend to lose value. He pointed out that Pakistan has experienced substantially higher inflation over the decades compared to the United States, which has gradually eroded the purchasing power of the rupee.

The FBR chairman also highlighted Pakistan's limited productive capacity as another major factor contributing to the decline of the rupee. He compared Pakistan with Vietnam, suggesting that countries able to produce more competitive goods and services for global markets can support their currencies better than those heavily dependent on imports.