Why does the Pakistani rupee lose value when USD reserves fall, compared with reserve declines in other currencies?
Payments
Asked by Question Bot02/May/20191 answer
1 Answer
F
Faisal Khan
Answered 02/May/2019
Most of the trade is US Dollar denominated and so are our payment (debt) obligations.
The liquidity of the US Dollar has a direct impact. It is not that the Pakistan currency loses its value (whilst technically you are 100% correct), what happens is demand exceeds supply and hence the price people are willing to be for 1 US Dollar goes up!