Media commentators, analysts and economists are criticising the fixed exchange rate regime followed by Pakistan from 2013 to 2017. They are of the opinion that the fixed rate is a prelude to an overvalued exchange rate, which makes export uncompetitive. If we notice carefully, the above tension is between the fixed exchange rate vs the flexible exchange rate. In the fixed exchange rate regime, the inflation rate was low in the country while the international interest rates also remained low. In the flexible exchange rate regime, the inflation rate remained high and the international interest rates started to increase in the first quarter of 2022.

Source: The Express Tribune October 17, 2022 07:51 UTC