How do overseas Pakistanis benefit from devaluation?  

 State Bank of Pakistan’s (SBP) Governor Reza Baqir said on 21st October 2021 that the depreciation of the rupee against the US dollar had benefitted overseas Pakistanis sending remittances to the country. 

Although after devaluation the overseas Pakistani sending home remittances get higher amounts Pak Rupees for each foreign exchange unit remitted to Pakistan for their loved ones but the rising food, electricity, petrol and other essential items prices of daily use more than offset the gain on exchange rates. On the other hand, the overseas Pakistanis who have invested in the stock and real estate market, the depreciation of the Pak Rupee adversely affected the real value of such investments.

For example, all those overseas Pakistanis have lost value of their stock market and real estate investments if they invested during the last three years because our currency has been devalued by almost 50% during this period but there have not been 50% increases in stock and real estate markets. So if an overseas Pakistani invested an amount equivalent to US$ 10,000 in real estate and the stock market in Pakistan during the last three years, the value of his/her Pak Rupees investments in stock and real estate are now much less than US $ 10,000 due Pak Rupee devaluation. In view of the foregoing, I am struggling to understand how devaluing benefits overseas Pakistanis. Perhaps the honourable governor of the State Bank of Pakistan can explain this in detail.

EJAZ AHMAD MAGOON,

London.

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