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Which Currency Should Be Preferred To Repay Loan Borrowed Several Years Ago?
I live in UK and My friend lives in Pakistan. In 2020 I borrowed him £4000 which was around 10 lac at that time. Now it’s 2025. Pakistan currency has depreciated now. Can i still ask my friend to give me back £4000. Or he has to pay me back 10 lac only. If he pay me just 10 lac then it’s equivalent to £2500 now a day. At the time i just borrowed him money and asked him to return me whenever he is comfortable again. Please could you help me what will be the current way to get that money back. I will really appreciate your kind help.
Best regards
Muhammad saqib
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2 Replies
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Which Currency Should Be Preferred To Repay Loan Borrowed Several Years Ago?
updated 2 weeks, 2 days ago
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Replies
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Both parties should adhere to the terms agreed upon at the time the loan was disbursed. The repayment should be made in the currency originally specified in the agreement. Furthermore, any adjustment for the time value of money (such as inflation) should be applied in accordance with the method or basis agreed upon at that time.
However, if no such terms were specified, both parties should seek a resolution that is fair and equitable. In the present case, repayment in UK Pounds rather than Pakistani Rupees would be more just, as it better reflects the time value of money compared to repayment in PKR.
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Thanks you very much brother. I really appreciated your well explained reply.
Best regards
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