Considerable money flows between the United States and Pakistan on a regular basis. In 2016, around U.S. $1.33 billion was sent as remittances from the U.S. to Pakistan. In the same year, trade of goods and services between the two countries stood at around U.S. $5.5 billion. Of this, while exports from the U.S. accounted for U.S. $2.1 billion, imports from Pakistan totaled to around U.S. $3.4 billion.
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The U.S. dollar has been used as the official currency in the United States since 1792. Other than the U.S., the use of the American dollar as sole currency is also found in Ecuador, El Salvador, two British Overseas Territories, the Federated States of Micronesia, Turks and Caicos Islands, the British Virgin Islands, as well as the Caribbean.
Some of the places where use of the U.S. dollar alongside other currencies is common include Zimbabwe, Costa Rica, Belize, Panama, Cambodia, and Myanmar. Some of the places that still peg their currencies to the U.S. dollar include Bahrain, Cuba, Hong Kong, Lebanon, Qatar, and the United Arab Emirates.
In April 2016, the international forex market turnover share of the U.S. dollar was more than 87%; making it the world’s most commonly traded currency by a large margin. It also remains on top of the world’s reserve currencies basket. Estimates suggest that over U.S. $5 trillion is traded in the forex market every day.
|Nicknames||Buck, moolah, paper, dough, dead presidents, |
bones, greenback, green
|Bank notes||$1, $2, $5, $10, $20, $50, $100|
|Coins||1c, 5c, 10c, 25c, 50c, $1|
The Pakistani rupee has served as the legal currency of Pakistan since the country gained independence from the British in 1947. Until 1948, when Pakistan introduced new currency notes and coins, the country made use of British Indian notes and coins with “Pakistan” stamped on them. The Pakistani rupee was initially divided into 16 “annas”. Decimalization of the currency took place in January 1961.
The word rupee comes from the Sanskrit word “rūpya”. It is believed that the first rūpaya denominated coins were introduced by the Mughal ruler Sher Shah Suri, during his reign from 1540 to 1545.
|Bank notes||Rs. 10, Rs. 20, Rs. 50, Rs. 100, Rs. 500, |
Rs. 1,000, Rs. 5,000
|Coins||Rs. 1, Rs. 2, Rs. 5, Rs. 10|
U.S. Dollar / Pakistani Rupee Historical Rates
The Pakistani rupee was pegged to the British pound until 1982. The currency switched to a managed float system in the first half of 1982. This caused the rupee to devalue by almost 40% from 1982 to 1988. In 1991, as the country began implementing economic reforms, the rupee experienced some stability against the dollar, and traded below Rs. 30 to the dollar until September 1993.
The Pakistani rupee lost ground against the U.S. dollar until the late 1990s, when the country’s large current account surplus caused the rupee to gain in value against the dollar briefly. Then, the State Bank of Pakistan, the country’s central bank, lowered interest rates and bought American dollars with the aim of stabilizing the rupee’s exchange rate and protecting the country’s export industry.
The 2008 general elections in Pakistan did not bode well for the rupee. Between December 2007 to October 2008, the rupee devalued by around 25%, dropping to a then record low of Rs. 81.525 against the dollar. Factors such as increased militancy, economic instability, and a drop in foreign direct investment saw the value of the rupee fall further. In February 2016, the Pakistani rupee traded at Rs. 104.66 against the U.S. dollar.
After consulting with the International Monetary Fund, Pakistan agreed to depreciate the rupee in December 2017. It was decided that State Bank of Pakistan would no longer interfere with the rupee’s exchange rate, and it would adjust according to prevailing market conditions. In July 2018, the rupee traded at over Rs. 124 against the U.S. dollar.
USD/PKR in the last five years
|U.S. $1 =|
|1 July, 2013||Rs. 101.700|
|1 July, 2014||Rs. 98.780|
|1 July, 2015||Rs. 101.875|
|1 July, 2016||Rs. 104.815|
|1 July, 2017||Rs. 105.400|
USD/PKR in the last five months
|U.S. $1 =|
|1 March, 2018||Rs. 115.710|
|1 April, 2018||Rs. 115.770|
|1 May, 2018||Rs. 115.775|
|1 June, 2018||Rs. 121.735|
|1 July, 2018||Rs. 124.060|
What Affects USD/PKR Rates?
In the past, the Bank of Pakistan constantly interfered in the foreign exchange market to try and stabilize the value of the Pakistani rupee. Noticeable macroeconomic amendments that began in the early 2000s helped Pakistan’s economy to some extent, and this caused the rupee to stabilize until late 2007. Regular remittances from Pakistanis working overseas have helped build the country’s forex reserves, although its significant reliance on imports has resulted in a growing current account deficit.
Payments made by Pakistan toward the China Pakistan Economic Corridor (CPEC) may further diminish the country’s forex reserves. It is estimated that Pakistan needs to pay around U.S. $90 billion in installments, starting from 2020. The effect that these payments will have on the country’s forex reserves may cause the Pakistani rupee to depreciate even more.
Pakistan’s significant foreign debt has resulted in devaluation of the currency by the government on multiple occasions. Militant attacks tend to have an impact on the country’s economy, and in turn, on the value of the rupee. However, the Pakistani government is trying to encourage growth by going the privatization way, hoping to attract foreign investment and reduce its current account deficit. This might work well for the rupee.
Other factors that may have an effect on the USD/PKR currency pair include policy changes implemented by the U.S. Federal Reserve, exports from Pakistan, and trade relations between both countries.
While sending money from the United States to Pakistan or the other way around is simple, it is important that you pay attention to the USD/PKR exchange rate that applies on your transfer. To get the best deal, all you need to do is compare the top overseas money transfer companies according to where you live.