Trade in local currency and its effect on dollar – in context of Pakistan, comparison with Asian countries

Abstract

As we know that the currency of our country, rupee is depreciating day by day due to various reasons. So we will be discussing the currency depreciation in the context of trade in local currency that how our currency’s value is decreasing due to trade factors. In order to get the better picture of our problem, we make comparison of Pakistan Trade along with the Asian countries including Korea, China and Japan. Then we will examine its effect on the base currency i.e. USD (US Dollar) as it is an International Currency for Trade in the world. The main purpose of this project is to determine the trade factors involved in devaluation of our currency such as Imports, Exports, Trade Deficit and Consumer Spending on imports that are keeping the rupee under great stress. And how we can improve the Pakistani Rupee. We have covered various topics in our project, which include concept of exchange rate along with importance. The currency devaluation and revaluation techniques and reasons, weak currency and strong currency including; the real world example its advantages and disadvantages. The trade balance concept, foreign trade of Pakistan, its major trade products and trade partners, trade figures, National Tariff policy of Pakistan by addressing the problem statements which include fall in the trade deficit of Pakistan, challenges faced in export growth, why Pakistani currency is weaker in the economy and what are the reasons behind the currency devaluation, whether it’s helpful or not. Trade in local currency, Pakistan trade agreement with Asian countries, and comparison between Asian and Pakistani economy, performing regression analysis on major trade factors. Moreover, providing relevant recommendations that can help Pakistan to boost its exports by following the amendments in the trade policy and appreciating Pakistani Rupee that will benefit our economy and mark Pakistan amongst top trading partners of Asia.