Every few months, Pakistanis wake up to news of the rupee slipping further against the US dollar. For many, it’s no longer shocking — it’s expected. But have you ever wondered why our currency continues to fall, while others, like the Japanese yen or even the Indian rupee, hold their ground?
Long-term issues
The answer isn’t just about daily exchange rates or IMF loans. It’s rooted in deeper, long-term issues — how productive our economy is, how credible our institutions are, how disciplined our government spending is, and how much trust the world has in us.
Let’s start with productivity. Countries that make things efficiently and at scale — whether it’s cars, electronics, or high-end textiles — naturally earn stronger currencies. Japan, Germany, even Vietnam have shown this. Pakistan, on the other hand, imports even the basics.
In 2024, over one-third of our imports were food and agriculture-related — wheat, palm oil, raw cotton — things we should be growing ourselves. That’s not just wasteful, it’s embarrassing for a country where nearly 40% of the workforce is in agriculture.
Weak industrial base and no innovation
Why is this happening? Because our farming methods are outdated, our water systems are crumbling, and there’s little investment in innovation. The same goes for industry — power shortages, red tape, and a lack of skilled labor make it extremely complicated for businesses to bloom.
Read more: Rupee weakens against USD after China retaliates to US tariffs
Institutional weaknesses
Then come the institutions. A currency is a reflection of trust. People trust the Swiss franc or British pound because their institutions are stable, transparent, and reliable. Investors know what to expect. In Pakistan, political instability, corruption, and policy flip-flops scare investors away. Even our central bank, despite improvements, struggles to maintain independence in a politically charged environment.
Discipline issue
And then there’s the big one: discipline. Countries that are capable of managing their budgets well, keep inflation low, and avoid unnecessary borrowing tend to have strong currencies. Pakistan, unluckily, hasn’t done this for decades. We live beyond our means, then turn to the IMF for rescue. Again. And again.
Productivity, governance, and leadership crises are the main factors
As of 2025, the rupee has dropped nearly 70% over the past decade — worse than most of our regional peers. Yet instead of tackling the root causes, we keep reaching for short-term fixes.
Here’s the truth: this isn’t just a currency crisis. It’s a productivity crisis. A governance crisis. A leadership crisis.
What to do?
If we strongly desire for a stronger rupee, we need to stop blaming external forces and start taking steps to fix our internal flaws — better farming, smarter industries, honest institutions, and real economic vision.
Because a currency doesn’t rise because someone wants it to. It rises when a country earns it.