From dollar at Rs 3.2 in 1947 to around Rs 200 in 2022, the history of Pakistani currency

Pakistani currency

We rarely notice the different pictures on the currency notes that we use on a regular basis as Pakistanis.  As many of us are not familiar that our currency notes and the way they are printed have been shaped by a long list of thoughtful and continuous efforts. Even the coins we use have gone through a number of changes. From 1947 to the present, we’ll discuss the history of Pakistani currency and its devaluation against the US dollar. We’ll also talk about what’s on the back of the cash notes and coins that are now in circulation. 

History Of Pakistani Currency Notes 

When Pakistan got its independence in 1947, Indian money issued by the Reserve Bank of India was in use on the subcontinent. Because Pakistan was a newly independent country, it was impossible to establish a central banking system right away. As a result, provisions were made for currency to be given to Pakistan from the Reserve Bank of India following its foundation. 

After 1947 

The Indian Rupee was the first currency, with the words ‘Government of Pakistan’ in English and ‘Hakumat-e-Pakistan’ in Urdu printed on the white section of the note intended for watermarks. A day before independence, the Governor General of India approved a provision for the issuing of money to the newly sovereign country. 

Read more: 22 IMF loans in 64 years: Pakistan and the International Monetary Fund loan history

The Reserve Bank of India would be the sole authority for the issuing of currency to both India and Pakistan until September 30, 1948, according to the provision. Pakistan’s government was given a one-year deadline to establish up its banking system and printing press. 

Meanwhile, to prevent counterfeiting due to overprints, the printing plates were updated to include the ‘Government of Pakistan’ tags on the notes. The notes were introduced into circulation on April 1, 1948, and came in denominations of 1, 2, 5, 10, and 100 Rupees. 

After The Establishment of The State Bank of Pakistan 

On October 1, 1948, the State Bank of Pakistan issued its first banknotes in the denominations of 5, 10, and 100 rupees. Thomas De La Rue & Company, a British business, printed the currency notes. The 5-Rupee note was blue, the 10-Rupee was reddish-orange, and the 100-Rupee note was dark green at the time. 

Six months later, on March 1, 1949, the 1 and 2-Rupee notes were released. Bradbury Wilkinson & Company, a British company, printed these. The back of the 1-Rupee note featured the Naulakha Pavilion, while the back of the 2-Rupee note featured the Badshahi Mosque. 

New designs for the 5, 10, and 100-Rupee notes were then submitted for approval, and the 5 and 10-Rupee notes were issued by the State Bank of Pakistan in September 1959, printed by Thomas De La Rue. The back of the 5-Rupee note featured the Khyber Pass, while the back of the 10-Rupee Pakistani currency note featured the Makli Tombs. 

After the initial design was turned down, the first 100-Rupee note was issued roughly two years later. The crescent moon and star, either as print or as a watermark, were used to indicate Pakistan on these early notes. 

However, after news of the fabrication reached the Cabinet in 1956, a fresh series using Muhammad Ali Jinnah’s photograph was created. The first note in this series, the 100-Rupee note, was published near the end of 1957 and was green in colour with a print and watermark of Muhammad Ali Jinnah on the front and the Badshahi Mosque on the back. The 5, 10 ,50, and 500 Rupee notes were also issued before the end of 1970. 

After The Separation of East Pakistan 

Many portrayals on the notes, such as Bengali text, were no longer appropriate after the partition of East Pakistan, and new Pakistani notes was intended to be issued. The 1-Rupee note was the first in this series, and it was launched in May of 1974. It was blue in colour and had writing in each of the four primary regional languages. The Minar-e-Pakistan was depicted on the back. Due of its usage of regional languages, which could potentially cause a rift among the people, this message was short-lived. 

A new one-Rupee note was launched in April 1975, followed by five, ten, and hundred rupee notes the following year. The 50-Rupee note, which was issued near the end of 1977, was next on the list. The 2-Rupee note was introduced in August 1985, while the 500-Rupee note was introduced in April 1986. In July of 1988, the 1000-Rupee note was printed and distributed. For a long time, these notes served as the country’s official currency. 

When new technology for enhanced money protection were available, it was decided to rebuild the notes with advanced protections. In August of 2005, the first ever 20-Rupee note was created and released. 

It was originally brown in colour and represented Mohenjo-Daro on the back. Other notes in the series were also redesigned, with the exception of the 1 and 2-Rupee notes, which were phased out in favour of coins. Later in 2012, the 5-Rupee note was likewise phased out. 

The 5000-Rupee note, which is mustard in colour and was issued in May of 2006, which is now the highest note in circulation. This was the first time in Pakistani history that this denomination was introduced. 

History Of Pakistani Coins 

In the past, Pakistani currency included coins of various denominations. Up to 1960, one Pakistani Rupee included 16 ana, with each ana containing 4 paisa, for a total of 64 paisa in each Rupee. 1 paisa, 2 paisa, 1 ana, 2 ana, 4 ana, 8 ana, and 1 rupee were the coins in circulation. 

Pakistan adopted the metric system for its currency after 1960, and each 1 Pakistani Rupee contained 100 paisa. 1 paisa, 2 paisa, 5 paisa, 10 paisa, 25 paisa, and 50 paisa were the coins of the time. The majority of these were in use until the 1990s, when they were phased out. 

The 1- and 2-Rupee coins were released around the same time and are still in use today, albeit the metal used to make them has changed. When the note was phased out, a 5-Rupee coin was issued. There is also a 10-Rupee coin in circulation, but it is rarely used. 

Depictions On the Backs of The Notes 

Have you ever pondered what is printed on the reverse of your currency notes? Apart from the watermarks and other printing standards that help prevent fraud, each note is imprinted with a historical, national, or cultural landmark. 

The table below shows what is featured on the back of each of the currently in circulation currency notes. 

Value Main color Description Period 
Obverse Reverse 
₨.10/- Green pink Muhammad Ali Jinnah Bab ul Khyber, the entrance to the Khyber Pass 27 May 2006 – present 
₨.20/- Brown/orange green Mohenjo-daro in Larkana District 22 March 2008 – present 
₨.50/- Purple K2, second highest mountain of the world, in northern Pakistan 8 July 2008 – present 
₨.100/- Red Quaid-e-Azam Residency in Ziarat 11 November 2006 – present 
₨.500/- Rich deep green Badshahi Masjid in Lahore 
₨.1,000/- Dark blue Islamia College in Peshawar 26 February 2007 – present 
₨.5,000/- Mustard Faisal Masjid in Islamabad 27 May 2006 – present 

Pakistani Rupee-US Dollar Exchange Rate 

The Pakistani rupee has been fiat money since the United States dollar’s suspension of paper currency convertibility into any precious metal in 1971. Prior to the Bretton Woods system’s downfall, currency was tied to the US dollar at a set exchange rate for international trade, with the dollar convertible to gold only for foreign governments. 

The rupee was tied to sterling until 1982, when General Zia-ul-administration Haq’s switched to a controlled float. As a result, between 1982–83 and 1987–88, the rupee devalued by 38.5 percent, and the cost of importing raw materials skyrocketed, putting strain on Pakistani finances and destroying most of the country’s industrial foundation. 

Until the turn of the century, the Pakistani rupee fell over the Us dollar, when Pakistan’s significant current account surplus drove the rupee’s value up against the dollar. In order to maintain Pakistan’s export competitiveness in the global market, the State Bank of Pakistan maintained the currency rate by decreasing interest rates and buying dollars. 

After the elections of 2008, the rupee had a dreadful year, losing 23% of its value between December 2007 and August 2008, plummeting to a record low of Rs.79 against the US dollar. 

The main causes of this devaluation were massive current and trade account imbalances that had accumulated since Pakistan’s credit boom in 2002. 

Foreign direct investment began to decline as a result of increased militancy in then NWFP now KPK and FATA, exposing the balance of payment’s structural issues; foreign exchange reserves plummeted to as low as US$2 billion. By February 2011, however, Forex reserves had rebounded and had reached a new high of $17 billion. More over US$10 billion of that total was borrowed money, on which interest was due. 

The rupee was trading at Rs.104 versus the US dollar in February 2016. Pakistan decided to weaken the rupee in December 2017 after talks with the IMF, and the State Bank of Pakistan (SBP) would now let the currency exchange rate to react to market conditions after months, if not years, of resisting expectations. 

The Pakistani rupee hit a new low of Rs.110 against the US dollar, and on July 18, it hit a new low of Rs.128 against the US dollar. On June 26, 2019, it fell to a new low of Rs.161 versus the dollar. 

According to figures issued by the SBP, the rupee lost again versus the dollar on March 17, 2022, to end at Rs.180. The Pakistan Rupee is now trading at Rs.199 as of May 31, 2022. 

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