Based on the conversation between Gabriel and Peter, Gabriel thought the acceptance of rupee is an opportunity that changes the way of using dollars as base currency; however, he didn’t consider the Pakistani economy which would lose the profit of the deal. Although Pakistan alleged that the domestic currency is control by the local government, the historical event doesn’t’ support the allegation. Pakistan’s deteriorating trade gap in 1996 had caused a significant drop in foreign currency reserves. The trade gap not only hurt the Pakistani economy but also made IMF activate austerity program, which devalued Pakistan rupee by 7.86%. Beside the historical event showing that the local government has less power over domestic currency than it alleged, current imposition from European Union on anti-dumping fines on Pakistan’s cotton might cause another devaluation of rupee.
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