Today, the rupee's extraordinary slide versus the dollar has sent shockwaves across the country, raising serious fears about the country's economic stability. The rupee has reached its worst position in history, with one dollar worth more than 295 rupees. This terrible scenario is a severe setback for Pakistan's currency, which has gradually lost value over the last 74 years.

The rupee has suffered greatly in recent years as it has faced a continuous rise in the value of the dollar. This is a nightmare era for the Pakistani currency. When Pakistan became an independent state in 1947, the dollar was worth Rs3.31. Despite the difficult conditions surrounding the country's establishment, the earliest years saw reasonably stable currency rates.

This meant that the Pakistani currency was about 70% stronger against the Indian rupee. However, a watershed event occurred in 1955, when the dollar's value saw its first considerable shift. The currency rate increased by 60 paisa, causing the dollar's worth to climb to Rs3.91. This marked the beginning of a path that would see the rupee's value fluctuate over the next many decades.

Emergence of the issue (1950-1971)

The Pakistani rupee dominated the Indian rupee until 1956. Following that, currency parity between Pakistan and India developed, with both countries accessing the US dollar at the same rate of Rs4.7.

Pakistan became a democratic state in 1956, with the adoption of its first constitution. Nonetheless, the country experienced political unrest, resulting in the installation of its first martial law in October 1958.

India faces its own economic issues over the border. The Indian rupee depreciated after the 1965 war with Pakistan. Prior to the 1971 war, the US dollar was worth 4.76 Pakistani rupees and 7.49 Indian rupees.

Afghan War (1971-1991)

With the fall of Dhaka, the Pakistani rupee lost value against the US dollar and the Indian rupee. Despite the continual flow of dollars to Pakistan during the Afghan Jihad (as it was referred as in the Western media at the time), the Indian rupee was stronger than the Pakistani rupee until 1991.

At the time of General Ziaul Haq's death in an aircraft accident in 1988, the Pakistani rupee was worth Rs 18 and the Indian rupee was worth Rs 13.91 against the US dollar.

This began to alter once Benazir Bhutto took office as Prime Minister.

The dollar exchange rate in 1991 was 23.8 to the Pakistani rupee and 22.74 to the Indian rupee, implying that the Indian currency was 4% stronger than the Pakistani rupee. However, in 1992, the Pakistani currency rose versus the Indian rupee, and the US dollar was selling for 25.08 Pakistani rupees and 25.91 Indian rupees.

Pre and post nuclear tests (1992-1999)

Historians and political pundits have frequently referred to the 1990s in Pakistan as the "lost decade," citing politicians' failure to unite on national concerns such as the economy as a key source of Pakistan's financial troubles. This research is supported by our bar lines indicating the exchange rate of Pakistani and Indian rupees.

The rupee gained ground against the Indian currency in 1993 and stayed strong until 1997, when two civilian administrations failed to finish their mandates. At this time, the Pakistan People's Party (PPP) and the Pakistan Muslim League (N) joined forces to repeal the contentious Eighth Amendment to the Pakistani Constitution.

Things changed when Nawaz Sharif secured nearly a two-thirds majority in the 1997 elections. The strong hand of weighty mandates has supplanted political discussion. Volatility rose, as did the value of the US dollar and Indian rupee relative to the Pakistani rupee.

Nawaz Sharif became an autocrat when opposition leader Benazir Bhutto went into self-imposed exile, and he was allegedly considering accepting the title of Ameerul Momineen (Leader of the Muslims). Pakistan's nuclear testing in May 1998 caused a comparable foreign exchange crisis to the one we are experiencing this month (January 2023).

India was in a similar situation when it faced international sanctions for its nuclear testing. However, a few months after Pervez Musharraf's October 1999 coup, Pakistan faced diplomatic isolation after the democratic government was expelled.

Dollar influx (2001-2008)

Just months before the September 11, 2001 attacks in the United States, the dollar hit 63 rupees as the Pervez Musharraf government attempted to reach out to the world and get acceptance for its October 1999 move.

With 9/11 and America's proclamation of a "war on terror," Pakistan was thrust back into the public eye. And it is at this point when the dollar's value rises. For the most of Musharraf's remaining seven years, Pakistan had a steady currency rate of approximately 60 rupees.

Musharraf declared martial law in November 2007 after a disagreement with the country's top court, Justice Iftikhar Chaudhry. Lawyers protested en masse, and stability vanished someplace in the air. As a result, the US dollar climbed in value versus the Pakistani rupee to 68 rupees, while the Indian rupee stayed steady. He talked with Benazir Bhutto and permitted the "Sharifs" to return in order to restore stability.

Return of traditional parties (2009-2018)

Elections returned the civilian administration to power. However, it will take more than a few years to stabilise the country, the economy, and the rupee.

The new exchange rate was now close to 80 Pakistani rupees per dollar. Between the Abbottabad raid and Nawaz Sharif's impeachment in July 2017, the US currency rose from Rs 86 to Rs 105.

The Pakistani rupee was now running parallel to the Indian currency. So we might claim that Pakistan was doing something good or something harmful, similar to India. Then there was a rise between Nawaz Sharif's resignation and the July 2018 general elections. The US dollar rose from 105 to 121 Pakistani rupees.

Imran Khan's tenure (2018-2022)

Between 2013 and 2016, Pakistan completed the sole IMF programme out of a total of 22 under Nawaz Sharif's administration. However, following the Panama Leaks case and, in particular, Nawaz Sharif's impeachment, the country was put on autopilot, and the economy swiftly worsened.

The IMF's new programme resonated when Imran Khan took power. The loan was approved following Asad Umar's dismissal. Because of Imran Khan's delay, the US dollar has risen to Rs 163 versus the Pakistani rupee.

The international lender's programme assisted in economic stabilisation, but political stability was ensured by the motto of "being on the same page," which provided a unique cooperation between civilian and military leadership.

In 2021, the Pakistani rupee increased somewhat. In June 2021, the exchange rate declined from Rs 167 to Rs 157. However, it soon began to grow again. As the country's volatility resurfaced, the value of the dollar increased. On April 9, when Imran Khan was deposed, the dollar was selling for Rs 184.

After Imran Khan's ouster, the currency's value improved for around 10 days. But on April 20, the US dollar was again trading at 185.

Our currency is not likely to stabilize until the country's political forces sit together. This can either happen through political dialogue, as we saw briefly in the early 1990s. But that was only a glimpse. Or introduce a new government under another autocrat with another "one page" ideology.