What is a Currency Converter?
A currency converter is a tool or software that helps convert one countryās currency into another based on the prevailing exchange rates. For example, converting Pakistani Rupee (PKR) into US Dollar (USD).
Why is Currency Conversion important in Business and Economics studies?
Currency conversion helps students and professionals understand the real value of goods, services, and investments in international terms. In Pakistan, it is especially important for analyzing imports, exports, remittances, and foreign investments.
Which currencies are most commonly converted in Pakistan?
Pakistani Rupee (PKR)
US Dollar (USD)
Euro (EUR)
British Pound (GBP)
Saudi Riyal (SAR)
UAE Dirham (AED)
Chinese Yuan (CNY)
These currencies are commonly used because of trade, foreign aid, overseas workersā remittances, and education abroad.
How do exchange rates affect Pakistanās economy?
Exchange rates impact import costs, export competitiveness, inflation, foreign debt, and investment. For example, when the PKR depreciates against the USD, imported goods become more expensive.
What role does the State Bank of Pakistan (SBP) play in currency conversion?
The SBP regulates exchange rates, manages foreign reserves, and issues official exchange rates that commercial banks use as a reference for conversions.
How can students calculate currency conversion in exams or assignments?
Students can use the formula:
ConvertedĀ Amount
=
BaseĀ Currency
Ć
ExchangeĀ Rate
\text{Converted Amount} = \text{Base Currency} \times \text{Exchange Rate}ConvertedĀ Amount=BaseĀ CurrencyĆExchangeĀ Rate Example: If 1 USD = 280 PKR, then $10 = 280 Ć 10 = 2800 PKR.