1 USD to PKR: A Historical Journey from 1947 to 2018
The exchange rate between the US dollar (USD) and the Pakistani rupee (PKR) has undergone significant changes over the years. In this article, we will take a journey through the evolution of the exchange rate from 1947 to 2018.
Early Years (1947-1955)
When Pakistan gained independence in 1947, the Indian rupee was the official currency. However, Pakistan introduced its own currency, the Pakistani rupee, in 1948. The initial exchange rate was fixed at 1 USD = 3.3 PKR. During this period, the PKR was pegged to the British pound, and the exchange rate remained stable.
Pegged to the US Dollar (1955-1971)
In 1955, Pakistan switched from a fixed exchange rate system to a managed float system, pegging the PKR to the USD. The exchange rate was set at 1 USD = 4.76 PKR. This period saw a significant devaluation of the PKR against the USD, mainly due to the country's trade deficit and balance of payments issues.
Floating Exchange Rate (1971-1982)
In 1971, Pakistan abandoned the fixed exchange rate system and adopted a floating exchange rate regime. The exchange rate was determined by market forces, and the PKR began to depreciate rapidly. By 1982, the exchange rate had reached 1 USD = 9.9 PKR.
Managed Float (1982-1999)
In 1982, Pakistan introduced a managed float system, which allowed for limited flexibility in the exchange rate. The exchange rate continued to depreciate, reaching 1 USD = 44.4 PKR by 1999.
Free Float (1999-2018)
In 1999, Pakistan adopted a free float system, allowing the exchange rate to be determined solely by market forces. The exchange rate has continued to fluctuate, with the PKR experiencing periods of rapid depreciation. As of 2018, the exchange rate stands at 1 USD = 115.5 PKR.
Conclusion
The exchange rate between the USD and PKR has undergone significant changes over the years, influenced by various economic and political factors. From a fixed exchange rate of 1 USD = 3.3 PKR in 1947 to a free float system with an exchange rate of 1 USD = 115.5 PKR in 2018, the Pakistani rupee has experienced a substantial devaluation against the US dollar. This historical journey highlights the importance of understanding the complexities of exchange rate systems and their impact on the economy.
