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Open market sees massive shortage of USD

epebble

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Actually flip that around. Once you stop paying them off, the lenders will have no choice but to agree to a steep haircut- the CDS rate would suggest close to 50%.

The flip side is that it will be next to impossible to get any fresh forex loan in future but it will be a blessing in disguise:

1. Pak will be forced to increase its domestic savings rate so that it doesnt have to borrow from abroad.
2. Pak will be forced to increase exports and curb imports so that it can keep CAD at near zero.

Pak will still need to import capital goods for growth and investment but that much amount can be financed by the taller than mountain friend for sure. Plus, friendly Arab countries can be expected to contribute a little bit as well.
Exhibit 1: Argentina. Not good
Exhibit 2: Zimbabwe - much worse

What Dar is doing is right. Essentially, he is practicing Soft default by conserving foreign currency and using it for only essentials. This is the best course of action till situation improves rather than any precipitate action that will cutoff Pakistan from external capital.
 

epebble

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Small LCs are starting to be released. There may be some easing in liquidity.

Thirdly, the finance minister said that there were around 8,000 cases of suspended letters of credit (LCs) two weeks back. “Previously, the government had announced that LCs and payments of up to $50,000 would be released.

“I had a meeting with the SBP (State Bank of Pakistan) governor today and we have decided, with the involvement of SBP, that we will increase this amount to $100,000. The SBP will start clearing them tomorrow,” Dar said.


 

HAIDER

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LC is on hold to control the dollar. People buying dollars cuz when LC opens, that will skyrocket.... per market predictions in Pakistan.
 

Johny D

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same in India, ppl r buying dollar above market price, dont know what they are doing with it but i suspect some big black fishes are parking their black money in dollars and sucking up liquidity infused by reserve bank of india..big scam for sure.
 

Olympus81

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Check out the rates for USD with NIC card and the rate without.

You don’t need to be a rocket scientist to figure it out.

Dar’s policies of suspending or delaying import LCs is going to backfire pretty soon. The munshi just can’t think beyond creative accounting.
 

ghazi52

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.,.,.,

Edible Oil Imports in Jeopardy After Banks’ Refusal to Provide Dollars​

Jehangir Nasir
Nov 18, 2022

The ghee and cooking oil industry Friday warned severe shortage of the commodity in the domestic market due to the refusal of commercial banks for providing US dollars to the importers of edible oil.

The industry has also hinted at the upcoming crises of the commodity in the local markets of the country.

Sources told Propakistani that the State Bank of Pakistan (SBP) has received a representation of the industry about the alarming situation of the expected shortage of ghee and cooking oil in the local market.

The industry has informed the Governor SBP that Pakistan is largely dependent on imports to the tune of over 90% to meet the national demand for edible oil.

Since mid-September, commercial banks have refused the importers of edible oil for arranging and providing US Dollars, hence, all the imported consignments are stuck-up and foreign suppliers are pressing hard to fulfill the contractual obligations at an early date or face the consequences such as late payment surcharge and cancellation of future shipments.

The ongoing situation is not a healthy sign and adversely effecting/damaging the image of Pakistan in the international trading arena, but may also result in a short supply of this staple food item in the domestic market. The situation is likely to aggravate in the upcoming month of Ramadan.

In view of SBP’s timely intervention and direction to all commercial banks to grant priority and provide USD to edible oil importers is inevitable and direly needed, to avert the looming crises.

The industry feels it most appropriate and its moral and national obligation in pointing out to SBP in time the crises in making and has suggested the direly needed remedy.
 

Catalystic

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Fiker na kero
Usd nahi to kya huwa, baqi currencies to hain na, unko chuuup lo

Waiting for the point where now india/afg will launch invasions…..guess they’re waiting for the lowest of the lowest point the state can reach.
With lumber1 and pdm, its never far away……

Civilians already dying on afghan borders, almost daily basis bloody civilians dieing but no care from the nuclear army.

Isse behter tha USA ko mulk thaikay pe de detay….
 

PakFactor

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Even MBS has balls to change and Pakistan are afraid of Libyan style happening? China will attack USA if US try attack Pakistan.

No one will attack the US If the US attacks Pakistan. The reverse might be true for others joining the US to hit Pakistan.
 

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