Often, foreign exchange controls can result in the creation of black markets to exchange the weaker currency for stronger currencies. This leads to a situation where the exchange rate for the foreign currency is much higher than the rate set by the government, and therefore creates a shadow currency exchange market. As such, it is unclear whether governments have the ability to enact effective exchange controls.[1]
Pakistan tried to control the foreign exchange market and India didn't. By creating the foreign exchange control department, Pakistan tried to stop the devaluation of their currency. India chose to not interfere and let the exchange market regulate itself.
Based on the above, answer the following question:
Which country had more economic problems because of the foreign exchange rate?