Economic Effects of Devaluation of Rupee Against Dollar in Pakistan – Research Snipers

Economic Effects of Devaluation of Rupee Against Dollar in Pakistan

Fuel/Oil Prices Have Gone High: The foremost effect of rupee depreciation was the rise in fuel prices. For January 2018, the petrol prices increased from Rs.3.96 per liter to Rs.6.74 per liter. Petrol prices are now Rs.81.53 per liter, Light Diesel price is now 58.37 per liter, High-Speed Diesel price is Rs.89.91 per liter, and Kerosene Oil price has surged up to Rs.64.32 per liter.

Read more: Increase in oil prices in Pakistan

Automakers have Increased Car Prices: The leading automakers in Pakistan have increased their car prices, causing disappointment amongst the general public. Pak Suzuki increased prices of Mehran VX, Mehran VXR, Bolan, Ravi, Bolan Cargo, WagonR VXR, and WagonR VXL. Indus Motors Company (IMC) has also changed prices of the 1.3 and 1.6 liters Toyota Corolla variants. Moreover, FAW revised prices of FAW V2, X-PV Standard, X-PV Dual AC, Carrier Deckless, Carrier Flatbed, and Carrier. Honda has also announced increased prices of Honda City 1.3L MT, Honda City 1.3L PT, City 1.5L MT, City 1.5L PT, Aspire 1.5L MT, Aspire 1.5L PT, Honda Civic 1.8 i-VTEC CVT, Honda Civic Oriel 1.8 i-VTEC CVT, Honda Accord VTi 2.4, HRV 1.5 CVT, and Honda CR-V Base Grade 2.4

Careem Increased its Fares: Careem the leading ride-hailing company in Pakistan, has announced an increase in its prices in Karachi, Lahore, and Islamabad. The increase in price is due to the increase in fuel prices, which is raised because of the devaluation of the rupee. As per Careem, the fuel price hikes have affected the Captain’s cost of doing business, directly and indirectly. Careem believes that its Captains are the driving force that provides a safe, easy and affordable ride to all its customers.  Thus as their business is getting affected, Careem has introduced a cost adjustment/increase in Careem ride prices.

Read more: Careem increases ride prices

Trade & Investment Environment Affected: The most apparent and immediate economic effect of the devaluation of the rupee is that the cost of import items gets higher and this includes raw material costs. Due to currency downfall, all imported goods get expensive which leads to the trade deficit. Also, the overall investment environment gets negatively affected.

Inflation: Rupee depreciation against the dollar is causing inflation all around and almost in all markets and industries in Pakistan.