It would be used for things like infra development. But it came right at the time where FCR was very low. Some high sitting person had commented to get the $ below 100Rs or something, this raises question.
Dear even at the 07Th Feb 2014 (as per your observation FCR was very low at that day)
'Total Forex Reserve' were $
7.589 Billion, that High sitting person was Finance Minister of Pakistan & was aware of that very fact that our current account is not that widen or unmanagable that it will lead free fall of PKR, as I showed you earlier in my previous post excluding other Financial Comitments our Trade Deficit + Remittances was $ -763 million (approximately 0.3179% of GDP) quit manageable. At the time of receiving that Saudi grant we had already met all of our commitments.
now to make this point more understandable and clears follow the calculations below
SBP 'NET' RESERVE as on July-13 ------ $ 5,203.8 million
SBP 'NET' RESERVE as on Dec-13 ------
$ 3,479.3 million
SBP 'NET' RESERVE Difference ----------
$ 1,730.5 million
it is approximately equivalent to the current account deficit $ 2.0 billion, as
$ 322 million was received in December 2013. (refer to the SBP Liquid Foreign exchange reserve table attached in previous post )
which detail are you are asking .... I was referring to all items of Current account deficit other than Trade Deficit+ Remitances.
I only stated current account deficit, and not complete balance, which stands on $2 billion. Overall balance is -2.1 billion, more than CAD. Proves me right. Would not quote SBP reserves from this, please refer below.
My dear calculation of outstanding is one thing and the payment of outstanding is another thing, I have showed you that we had already fulfilled all of our financial commitments ..... so what are you trying to point out here ....
I quoted the news was for before 14 feb. Please check -
Current account deficit widens to $2.05 billion - thenews.com.pk
I was assuming it would be prior to the 1.5 billion transaction, thus giving the situation of SBP without the aid.
Now check SBP statement, on 7 feb, the reserve is 2.8billion, which is what the newspaper reported. Also, the news said that
2.6 out of 2.8 is borrowed from commercial banks. Unfortunately I am unable to find the relevant detail in the SBP site but I suppose that article is reliable enough. No?
No, either reporter was just illiterate in terms of economics or it is mis-reported, I have already told you from an authentic source that SBP had 'net' foreign reserve of $ 2.8413 billion and Scheduled commercial banks were holding $ 4.7483 billion as foreign reserves which constituted a total of $ 7.5896 billion forex reserves.
Secondly government borrow from Pakistani commercial banks in PKR not in $ and that to meet Government expenditures
as normal practice around the whole world ...... nothing extra ordinary here
One more thing is the borrowing from banks for the under discussion period stands @1.819 billion not for 2.6 billion there is no such figure of borrowing from Shedule banks
source SBP Monetary Policy Information Compodium March-2014
link:
http://www.sbp.org.pk/m_policy/2014/MPS-Mar-2014-Compendium.pdf
No, I meant that this aid is very percentage of Pakistan's yearly foreign trade. My purpose of bringing this up was that the foreign trade of Pakistan is not a big figure, an aid of a billion and half dollar can easily tip the scales. Certain person can live up to his claim of bringing the currency down to 1$ = 100PkR. CAD could be balanced out. Any mismanagement in fiscal policies can be hidden behind it.
if your logic is that every single penny earned or borrowed cause a positive impact in the balance of payment than my dear $ 400 million or $ 400 billion also tipped the scale to a certain degree for the balance of payment of India ....
plz allow me to say, this $ 1.5 have not made any extraordinary impact on the balance of payment (if you account other forex receivable which are much higher than this amount) ..... its just help to reduce the speculations from the forex market (I would not say that it has ended the speculation)
As far as mis-management of policy is concern I give you hint here our Current transfer were standing at $ 11.542 billion against 23.737 billion, and out $ 11.542 billion $ 9.0 billion were the remittances because of this reason speculators were playing their role.
There is nothing to lecture. Yes, India has taken aid. A lot of it. There is nothing to criticize Pakistan about it. But I would point out two things - it was never a deciding factor. Like I showed in my post before - the aid from 18 years - 31 billion dollar would not be sufficient to cover the account deficit of this one year alone. Infact, India would be giving more than a billion dollar in aid to other countries this fiscal.
Second - the government was quick to take corrective measures. Which is where I would criticize the Pakistani government. It has been receiving large amount of aid for a long time, yet it failed to take any measure to reduce the deficit.
Again I posted those figures to reply certain class of posters, would repeat myself that its non of my concern that India borrowed $ 400 billion or received $ 31 billion as grant ..... the basic purpose was to shut some big mouths ....
It is true that it has been hit by war and terrorism, but you cannot call the performance of either of your government - this or the previous one - to be satisfactory.
I am not here to defend any government either, but it does not mean I should accept the comment of every tom dick & harry .....
gawd try uploading a video next ..... Try YouTube !!!
. I quoted a figure for July November, the July-Jan data from SBP report stands 14.7 export and 24.5 import.
