Daronomics: The fallacy of fixing currency price

[Maula Jatt]

 

[Olympus81]

Compare the global oil prices that have increased from April ‘22 onwards in % ($) against oil prices that have increased from April ‘22 in % (Rs).

You guys will get your answer.

 

[SaadH]

In his previous tenure, Dar borrowed $20 bn at 8.5% by far the highest in the region and instead of investing that into projects that would pay long term dividends/returns like setting up industry or building dams, plowed it all in buying dollars to keep it artificial lowered.

 

[hydrabadi_arab]

Fixing petrol price was also disaster. Too bad PTI will call out Dar but not Imran Khan.

 

[HAIDER]

In his previous tenure, Dar borrowed $20 bn at 8.5% by far the highest in the region and instead of investing that into projects that would pay long term dividends/returns like setting up industry or building dams, plowed it all in buying dollars to keep it artificial lowered.

Yes, his lending was at an extremely high rate of interest. That was the time when interest rates were around 4 percent.

 

[xyx007]

There is no need to worry, we are in the expert hands of Dar, who will ensure flood relief funds will be transferred to foreign accounts within a blink of an eye, so the whole nation will be pleasantly surprised how and why it will happen. As a result, dollars manically reduce to 100 rupees.

 

[Mugen]

https://www.dawn.com/news/1712745/dar-announces-12-rupee-cut-in-petrol-hsd-prices

View attachment 883797

A very people friendly move by Mr. Dar

PDM is darling of India, look at this Indian defending him no matter what.

 

[Wood]

PDM is darling of India, look at this Indian defending him no matter what.

I only posted news that is relevant to the thread.

I acknowledge that sometimes it is necessary to maintain currency stability for short periods so that domestic industries are able to import the goods required for manufacturing at a predictable cost. The devaluation must be gradual. But I have never defended the move to burn $ for a sustained period to keep currency value artificially higher. It is wrong no matter which government does it. It will fool the people into thinking that they are richer than the reality

 

[nahtanbob]

A strong currency is in general an asset. Pakistanis are unable to use the strong currency to create a viable economy. It is a reflection of the state of Pakistani society
In those cases you do devalue the currency to establish an equilibrium

 

[ghazi52]

.,.,,.

 

[HAIDER]

 

[SoulSpokesman]

Although @Wood Saar seems to have a soft corner for PDM, he does have a point. While Dollar Dar has reduced the petrol prices which his detractors are attributing to falling crude prices, the Indian govt hasnt been so generous. Delhi has the cheapest petrol price but even here it is priced at around Rs 97/litre or about 1.2 US$. This would translate to PKR 270.

The PDM govt is doing the best it can.

Regards