KARACHI: President of the Pakistan Business Forum (PBF) Khawaja Mehboob-ur-Rehman has called on Finance Minister Muhammad Aurangzeb to take urgent steps to stabilise the Pakistani rupee to support the country’s industrial and agricultural sectors.
In a letter to the finance minister, the PBF president highlighted the need to address the undervaluation of the rupee, which he argues has weakened Pakistan’s economic resilience over recent years.
Expressing concern over the rupee’s persistent decline, Rehman noted that the rupee has experienced substantial depreciation over the past five years, undermining both agriculture and industry. He highlighted the disparity between Pakistan’s exchange rate and those of neighbouring countries, where stronger currencies have helped maintain economic stability. The PBF president cited two particularly challenging periods, from 2008 to 2013 and 2018 to 2022, when the rupee’s sharp decline created economic difficulties for businesses nationwide.
While Pakistan’s recent IMF package has bolstered foreign reserves, Rehman stressed that currency depreciation remains a key obstacle to sustained economic growth. According to his assessment, the rupee’s fair value should be around 230 against the US Dollar, a level he argues would more accurately reflect Pakistan’s economic fundamentals. Without a stronger rupee, he warned, inflation will continue to burden citizens and high input costs will limit local industries’ competitiveness, both domestically and internationally.
Reflecting on Pakistan’s economic history, Rehman pointed out that ongoing currency depreciation could push the PKR exchange rate close to 400 to the dollar within a couple of years if left unchecked. He underscored the need for balanced trade policies and a strong currency to address longstanding trade and current account deficits.
Rehman emphasised that the finance minister, with his extensive banking experience, is uniquely positioned to lead initiatives for currency stabilisation. He urged a collaborative approach among key stakeholders to resolve the exchange rate challenges, reiterating that Pakistan’s currency remains undervalued.
“Our economy has suffered severely due to rupee devaluation,” Rehman noted, asserting his belief that the rupee is fundamentally stronger than its current valuation. He also recommended that the government engage with international institutions to re-evaluate the real effective exchange rate (REER) to support Pakistan’s economic objectives.
