The history of Afghanistan is older than Pakistan. Both are Islamic Countries; there are some primary reasons why the Afghanistan currency is more vital than Pakistan.
First of all, the primary reason is “Imports and Exports.” The Imports and Exports system dramatically affects any country’s economy and currency value. So far as we are talking about the Afghanistan currency, Afghanistan has no industries. It has to import all its goods from other countries, like steel, wheat, and other usable things. Now we should understand how imports and exports affect the value of the Currency of any country.
When a country exports its stuff to other countries, it has to keep the value of its currency low; because of that, it exports its material to other countries. Therefore, Pakistan has to preserve the value of its Rupee lower than the Dollar. Other countries may take an interest in buying things from Pakistan.
Let us explain via an example
With an example, it is easy to understand how the Pakistani currency value is lower than Afghanistan’s. If a Pakistani makes shoes, the price of one pair of shoes is 500 Rupees, equal to one Dollar. If he sells his boots for one thousand rupees, it would equal two Dollars. Thus, his product will become costly for other countries, and they would also not take an interest in his shoes. Now the value of Pakistani Currency would be kept lower than the Dollar. Thus, one Dollar will become equal to one thousand. Therefore, Pakistan has to keep low the value of its Currency. This is the way of international business, in the same way exports of Pakistani goods effects the currency value.
But on the other hand, Afghanistan does not export things; instead of that, Afghanistan imports stuff from other countries. Therefore, Afghanistan keeps its Currency’s value higher than the “Do.” ar.” Therefore, other countries are interested in exporting their things to Afghanistan because they get an attractive amount from Afghanistan.
Afghanistan has not a steel industry. Therefore, it has to import its whole steel from other countries, like in the last few days. Even Afghanistan fought a great war against America, and they fled away the American army from their land, lost the battle, and re-established its economy. Afghanistan has also received live aid from many influenced countries. It imports many goods from other countries to re-construct the government and the economy. Owing to it, the value of an Afghani currency is higher than Pakistan.
There is another reason for the stronger Currency of Afghanistan than Pakistan. Pakistan has to take interest loans from other countries. When Pakistan keeps the value of the Rupee lower than the Dollar, countries agree to give Pakistan loans. In that case, you will get more rupees than a single dollar. The USA and other countries are also aiding Afghanistan. But it has taken less dept than Pakistan. So, importing goods is making the Afghanistan currency stronger than Pakistan’s.
You must log in to post a comment.
[…] Why Afghan Currency has more value than Pakistan’s? […]