How Pakistan's Currency Lost Its Value: A 77-Year Decline from 1947 to 2024

The Golden Era: When the Dollar Was Stable (1947-1954)

Pakistan’s story with the US dollar began immediately after independence in 1947, when 1 USD equaled just 3.31 PKR. For nearly eight years, this exchange rate remained frozen at the same level—a testament to post-independence currency stability policies. This period represented the only time in Pakistan’s modern history where the rupee maintained such unwavering strength against the world’s reserve currency.

The First Crack: Gradual Depreciation (1955-1971)

Starting in 1955, the Pakistani rupee began its long descent. By 1990, the exchange rate had already climbed to 21.71 PKR per 1 USD, showing how significantly the currency had weakened over three and a half decades. Throughout the 1970s and 1980s, the rupee continued its downward spiral, moving from 4.76 in the early 1970s to nearly 21 PKR by 1990—more than a 340% depreciation in just two decades.

The Acceleration Phase: 1990s Onward

The 1990s marked a critical turning point. The 1990 USD to PKR rate of 21.71 would soon look like ancient history. By the end of that decade (2000), the rate had skyrocketed to 51.90 PKR per dollar. The early 2000s saw brief stabilization attempts, but by 2008, the global financial crisis pushed the rate to 81.18 PKR. The real collapse came after 2018, when the rupee crashed through 139.21, then 163.75 in 2019, and finally 168.88 in 2020.

The Free Fall: 2022-2024

The worst was yet to come. In 2022, the rupee hit an alarming 240 PKR per USD—a staggering devaluation that reflected Pakistan’s macroeconomic crisis. By 2023, it touched 286 PKR, marking the rupee’s lowest point on record. As of 2024, while the rate has slightly recovered to 277 PKR per dollar, it remains a far cry from the stable days when 1 USD was worth just 3.31 PKR.

What This Means

The 77-year journey of Pakistan’s currency tells a story of persistent economic challenges. From 1990 alone, when 1 USD was 21.71 PKR, to today’s 277 PKR, the rupee has lost over 90% of its purchasing power against the dollar. This dramatic shift reflects decades of inflation, fiscal deficits, and structural economic issues that continue to plague the South Asian nation.