How Pakistan's Dollar Rate Collapsed: From 3.31 PKR to 277 PKR (1947-2024)

The Stable Decade: 1947-1954

When Pakistan gained independence in 1947, the exchange rate held remarkably steady at 1 USD = 3.31 PKR. This fixed rate remained unchanged for eight consecutive years, reflecting the currency’s initial stability during the nation’s early years. The peg lasted through 1954 without any fluctuation, demonstrating institutional confidence in the Pakistani rupee during the post-partition era.

The First Major Adjustment: 1955-1971

Beginning in 1955, cracks appeared in the fixed system. The rate jumped to 3.91 PKR per dollar, followed by another significant shift to 4.76 PKR in 1956—a 22% devaluation in just one year. This new benchmark of 4.76 PKR held steady for over a decade, making it the second longest fixed rate in Pakistan’s history. The stability persisted through the 1960s and early 1970s until the economy began showing deeper stress signals.

The Gradual Erosion Phase: 1972-1989

The real deterioration began in 1972 when 1 USD suddenly jumped to 11.01 PKR—a massive 131% devaluation. By 1973, it had already corrected to 9.99 PKR, where it remained relatively stable through the 1980s. However, by 1989, the rate had climbed to 20.54 PKR, showing the cumulative impact of inflation and economic pressures accumulating through that decade.

The Acceleration Begins: 1990-2008

Throughout the 1990s, the rupee faced relentless pressure. The rate accelerated from 21.71 PKR in 1990 to 63.50 PKR by 2001—a near tripling in just eleven years. The early 2000s saw temporary stabilization, hovering between 57-61 PKR. However, the global financial crisis of 2008 marked a critical turning point: 1 USD climbed to 81.18 PKR, representing the most dramatic shift Pakistan’s currency had experienced in recent memory at that time.

The Crisis Years: 2008-2024

After 2008’s shock, the depreciation became virtually unstoppable. By 2009, the rate had reached 84.10 PKR. The 2010s saw continuous decline accelerating through 2019 when it hit 163.75 PKR. The 2020s brought even steeper drops: 168.88 PKR in 2020, 240 PKR in 2022, and peaking at 286 PKR in 2023. As of 2024, 1 USD trades at 277 PKR, having recovered slightly from the 2023 peak.

What This Means

In just 77 years, the Pakistani rupee has lost 99% of its value against the dollar. What cost 3.31 PKR in 1947 now requires 277 PKR—an 8,300% increase in nominal terms. This long-term devaluation reflects decades of economic challenges, inflation differentials, and structural imbalances in Pakistan’s economy and its external accounts.