Some letters in some of the Pakistani newspapers are hillarious. I usually like to read three areas in Dawn – the national newspaper – which are: Letters, Opinions, and Editorial. The opinions and letters section is often just over the top. Here is a letter by this guy from Karachi who says Fixed Exchange Rate is a mistake. There was a time when the 4 Pakistani Rupees were equal to USD1 and that is how it should be. It will, he surmises solve the trade problem for Pakistan and bar the US from buying more Pakistani goods for “cheap”.
What he does not apparently appreciate is that Trade Imbalance is due to how much you “want to” or “have to” buy from the outsiders vis-a-vis what they want or need to buy from you. This trade imbalance or deficit is what creates the pressure on the currency. You may try to artificially hold the currency exchange rate but a deficit without rate correction will lead to a rise in inflation!
I am sure this guy is not the Nobel Prize winner wannabe in Economics, but its not him whose naivette is troublesome.. but that of the editor who lets such kindergarten trash get published in his/her papers editorial page!
If this was not enough – this Mansab Ali Khan – comes up with the last masterstroke!
What is needed is the internationally recognised currency with no affiliation with any country. While the study for introducing such a currency is made, nations should conduct their foreign trade under the barter system. As a temporary measure, Pakistan should revert to a fixed exchange rate of one US dollar equal to four rupees.
Sure. If the political uncertainty is not solved in the next 6 months, when Taliban comes to town to rule.. then he can have his wish come true.. of a barter system! A country whose ex-prime minister was a hair breadth away from becoming the CEO of Citibank, at least the readers deserve a better level of intelligence in the national daily sections!