Diamonds are highly precious and water is cheap. Why? diamonds have no real purpose but water is essential for life. Still diamonds are so expensive and water is so cheap. This is because water is available in abundance and with little effort, more water can be arrranged but diamonds are scars and more supply needs more effort. So it is the affect of demand and supply that determines the price of everything.

If we ignore all other factors, including demand, and determine the price on the basis of supply, price will increase as quantitly supplied is reduced and price will decrease with an increase in supply. Supply and price have inverse relationship. Anything vaialbe in abundance and easily has very little monetary value while on the other hand anything scarce has huge value.
 

Same rule applies to the currency. If supply of PKR is increased, its value will decrease and if supply is decreased, its value will increase. Provided that other factors remain constant. Here we have taken actual data of Pakistan's PKR value in term of USD in comparison with Broad Money.

YearPKR_Per_USDBroad_Money
19604.761907252000000.00000
19614.761906964300000.00000
19624.761907596400000.00000
19634.761908875500000.00000
19644.7619010779400000.00000
19654.7619012058000000.00000
19664.7619014605000000.00000
19674.7619015081400000.00000
19684.7619016959700000.00000
19694.7619018580100000.00000
19704.7619020752100000.00000
19714.7619023609900000.00000
19728.6813827734200000.00000
19739.9942431562200000.00000
19749.9000031182300000.00000
19759.9000037797600000.00000
19769.9000049967300000.00000
19779.9000058935200000.00000
19789.9000070629400000.00000
19799.9000084117500000.00000
19809.9000097321600000.00000
19819.90000108537600000.00000
198211.84746132232500000.00000
198313.11697159881600000.00000
198414.04633167312300000.00000
198515.92839191985100000.00000
198616.64750222842300000.00000
198717.39880259396300000.00000
198818.00329279377500000.00000
198920.54149300054000000.00000
199021.70737334991300000.00000
199123.80076398453100000.00000
199225.08279515202100000.00000
199328.10718608626000000.00000
199430.56659714348000000.00000
199531.64268812998000000.00000
199636.07868976155000000.00000
199741.111521170525000000.00000
199845.046661262521000000.00000
199949.500691316989000000.00000
200053.648181476676000000.00000
200161.927161650126000000.00000
200259.723781927995000000.00000
200357.751992266163400000.00000
200458.257862731053000000.00000
200559.514473182515000000.00000
200660.271334631578000000.00000
200760.738515439249000000.00000
200870.408035794143796000.00000
200981.712896814495817363.99000
201085.193817807082726900.00000
201186.343388790979839286.22000
201293.3951910320172533548.00000
2013101.6288911694370341859.60000
2014101.1000813044335106623.40000
2015102.7692714633262962941.40000
2016104.7691116625735215555.40000
2017105.4551618276890431006.40000
2018121.8240620074311419085.40000
2019150.0362522417591739487.40000



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