A lot of people have asked me to do a thread on the exchange rate, so here goes. I will cut some corners in the interest of speaking plainly. While my reference is Pakistan, I think what I say applies more generally to emerging market and poor countries.
This is a continuation of my previous thread. Let us first consider what factors affect the value of a currency under a flexible exchange rate. On a day 2 day basis, the exchange rate is determined by the demand and supply of foreign currency in the interbank market.
Delayed prudent economic decisions has pushed economy on the brink. As consequences, to stabilize rupee wud b a uphill task next to impossible. PKR will continue to adjust value downward What Govt should do in this Currency Board scenario, just to quit doing business & downsize
Wikipedia has been banned in Pakistan for sacrilegious content, Ahmadi places of worship are being destroyed, Blasphemy law is being strengthened and the Punjab Gov even introduced declaration of finality of the Prophet(SAW) in the Nikkahnama.
When Govs fail this is what they do