to understand the effects over pricing of currency plz visit:
(link)
In most simple term
1 - it will increase the cost of production and services in the country
2 - due to the increase value of money
3 - which mean services, labour, raw material and all other inputs produced in Pakistan will become expensive
4 - and imported good and services will become cheaper therefore imports will increase
5 - this will affect negatively the production and services within the country
6 - which will force local business to either shutdown, layoff, implement adjustments, restructuring, reduction, resizing resulting
7 - Slowdown of local economy
8 - which will further contribute in low consumption of goods and services in country triggering Recession
9 - increase Trade deficit
10 - which will consume the existing foreign reserves
11 - and to meet BOP commitments economy would be forced to take expensive foreign loan
12 - which will force the currency devaluation even if favourable adjustments of exchange rate are implemented
13 - local economy structure which was already suffering by negative effects of artificial overvaluation of currency will not generate the business locally on mass scale to address the situation
14 - as basic economic structure would take let's say 8-10 years to recover to normal status
BTW we have witness all these happening in Past few years in Pakistan .... Recall the era of DAR- Economy
