Dollar crosses 100 again

[GreenFalcon]

which may make speculators start buying dollars hoping to sell later.

It's like stock market, a plane crashes and before anyone knows what happened, stock takes a dive, which make other people also start selling. Speculation is bad


Dude, if you don't know economics, i'll teach u, read below

Taking it do 35 will murder economy. We're export oreiented market. People will stop buying from us and buy from other cheaper nations. You can't have dollar drop 60% in 4 years.

10-20 % makes sense. 2-4% a year is no biggy. And if they manage that, in my humble opinion, it'd be a very big acheivement. Like dollar now is 100. After 4 years, it'd be 92 with 2% drop. No one will notice 2 rupee yearly drop, but at the end, they'll notice that it's cheaper to buy dollar.

 

[VCheng]

which may make speculators start buying dollars hoping to sell later.

It's like stock market, a plane crashes and before anyone knows what happened, stock takes a dive, which make other people also start selling. Speculation is bad


Dude, if you don't know economics, i'll teach u, read below

Taking it do 35 will murder economy. We're export oreiented market. People will stop buying from us and buy from other cheaper nations. You can't have dollar drop 60% in 4 years.

10-20 % makes sense. 2-4% a year is no biggy. And if they manage that, in my humble opinion, it'd be a very big acheivement. Like dollar now is 100. After 4 years, it'd be 92 with 2% drop. No one will notice 2 rupee yearly drop, but at the end, they'll notice that it's cheaper to buy dollar.

The value of the PKR will depend on what Pakistan produces and what it consumes. As long as this balance remains negative, the PKR will remain on a path of steady devaluation.

 

[WishLivePak]

Indeed. There are numerous other things that can devalue currency.

 

[WishLivePak]

paitouh

 

[SBD-3]

which may make speculators start buying dollars hoping to sell later.

The individual investors can't buy from interbank market. They do so from Kerb market for their FX needs. The possible source of speculation in interbank market can be 1) Delaying the export proceeds 2)Booking import payment. However, unlike KERB, such people can easily be identified and dealt with.

 

[FunkyGen]

The value of the PKR will depend on what Pakistan produces and what it consumes. As long as this balance remains negative, the PKR will remain on a path of steady devaluation.

Then how'd it get the appreciation from 108 to 98?
Things go wrong but their are ways to set them right.

 

[WishLivePak]

Then how'd it get the appreciation from 108 to 98?
Things go wrong but their are ways to set them right.

saudi dollars, speculation.

Rupee was appreciating and business started selling off.

Before businesses kept dollars (required to sell within 3months) due to speculation that dollar will keep rising. Saudi dollars came, dollar dropped, caused havoc and it went to as low as 95.

 

[AZADPAKISTAN2009]

Time are near where every Pakistani home should

a) Have a live Cow in their home for Dairy
b) Grow a small green vegetable farm in backyard
c) Own 20 Chickens , for production of Eggs for morning

Free...production only have to feed them grain or chicken feed

 

[VCheng]

Then how'd it get the appreciation from 108 to 98?
Things go wrong but their are ways to set them right.

That appreciation was manufactured and has no real foundation. The basic trend towards devaluation will remain around 10% per year. The longer the PKR is held at 100 artificially, the harder the inevitable adjustment will be.

 

[WishLivePak]

That appreciation was manufactured and has no real foundation. The basic trend towards devaluation will remain around 10% per year. The longer the PKR is held at 100 artificially, the harder the inevitable adjustment will be.

This. It'll collapse miserably, like Iranian currency (but not as bad). This why it ain't no biggest achievement. If the gov't does a stable 2% yearly appreciation, it'd still be major acheivment than 'fake' 10% yearly.

 

[AugenBlick]

That appreciation was manufactured and has no real foundation. The basic trend towards devaluation will remain around 10% per year. The longer the PKR is held at 100 artificially, the harder the inevitable adjustment will be.

WIthout fundamentals it will be very very difficult to maintain currency rates.
INR took a nose dive recently.
I think INR is overvalued due to modi by about 5%.
Lets see though.
Anyway on topic, It depends on Current account deficit and Savings rate both. What are these factors for Pakistan

 

[Jungibaaz]

That appreciation was manufactured and has no real foundation. The basic trend towards devaluation will remain around 10% per year. The longer the PKR is held at 100 artificially, the harder the inevitable adjustment will be.

Exactly, what I've been saying too, it's all very temporary. In fact, PKR will come sliding down again when the effects of the loans kick in again.

 

[WishLivePak]

WIthout fundamentals it will be very very difficult to maintain currency rates.
INR took a nose dive recently.
I think INR is overvalued due to modi by about 5%.
Lets see though.
Anyway on topic, It depends on Current account deficit and Savings rate both. What are these factors for Pakistan

I think it's bad... Pakistan borrowed a lot of money and it'd have to big back.. The eurobond at 7% rate or something and so forth. All the dollars will need to be given back at some point. So they've to work hard and improve economy to make the dip as small aspossible.

Exactly, what I've been saying too, it's all very temporary. In fact, PKR will come sliding down again when the effects of the loans kick in again.

How high will it go? 150 (based on 5 year term)?

 

[AugenBlick]

I think it's bad... Pakistan borrowed a lot of money and it'd have to big back.. The eurobond at 7% rate or something and so forth. All the dollars will need to be given back at some point. So they've to work hard and improve economy to make the dip as small aspossible.

OK so CAD data I could not find but look at this

Global Competitiveness Report-Google Public Data Explorer

Savings % GDP
public- and private-sector savings as a percentage of nominal GDP
India 35 %
China -approx 50%
Pak - 15%
World Average - 22%
EDIT:
CAD picture very bad for India & Pak
Global Competitiveness Report-Google Public Data Explorer
Thats why INR nosedived

 

[WishLivePak]

OK so CAD data I could not find but look at this

Global Competitiveness Report-Google Public Data Explorer

Savings % GDP
public- and private-sector savings as a percentage of nominal GDP
India 35 %
China -approx 50%
Pak - 15%
World Average - 22%
EDIT:
CAD picture very bad for India & Pak
Global Competitiveness Report-Google Public Data Explorer
Thats why INR nosedived

But Indian economy can have miracles unlike of Pak. It needs to pay its debt.

So how bad you think pkr will drop?