Open market sees massive shortage of USD

[epebble]

Will this shortage only be experienced by the poor general public, or the DHA/bahria/fizaia/naval colonies?
Will politicians, judiciary, bureaucrats, jernails also experience??
Will booze and drugs stop flowing through teenagers and partiers in posh areas ???

Just like any crisis, this will affect the poorer people more than the rich. It may cause many skilled people to leave the country. That may create a vicious circle where the skilled and talented people leave and only the unenterprising/less productive/unproductive stay back. Recovery is much harder in such a depleted society even if money shows up somehow.

 

[m52k85]

I called up a local exchanger in karachi, told him I wanted to sell GBP, he said he will buy it at 291 when the online (inter bank) rate at the time was 274. If he's buying at 291 wonder how much he's selling at? min 295 I would guess.

 

[maithil]

If Pakistan is not bailed out, you would see shortage of all kind of commodities.

For example shortages of Petroleum Products, natural gas, food items including wheat , medicines and many others which cannot be predicted now.
Some international companies may cease operations in Pakistan, like Airlines.
You may see accelerated devaluation of PKR .

Banks has already started rationing USD, which is usually first sign of impending liquidity crunch. If things gets too bad for too long, like in Lebanon or Venezuela, then businesses may resort to accept USD/Euro instead of PKR.

But I hope I am wrong.

Take devaluation out of equation. With current Finance minister, devaluation (at least official) is not an option... What impact do you foresee without letting currency devalue..

I called up a local exchanger in karachi, told him I wanted to sell GBP, he said he will buy it at 291 when the online (inter bank) rate at the time was 274. If he's buying at 291 wonder how much he's selling at? min 295 I would guess.

More like 305-310..? They will keep at least 5% margin in volatile economic conditions..

 

[Riz]

Default watan e azeez ki taraki ki taraf pehla kadam hoga : DJ ISPR

 

[Imran Khan]

Default watan e azeez ki taraki ki taraf pehla kadam hoga : DJ ISPR

Dj ice piyar to gya ab waly ka kya kasoor

 

[Riz]

Dj ice piyar to gya ab waly ka kya kasoor

Us bechary ka bhi koi kasoor nhi tha, bolta woh the shabd bajway k hoty thay

 

[Imran Khan]

Us bechary ka bhi koi kasoor nhi tha, bolta woh the shabd bajway k hoty thay

As bajwa gone ab inko maaf kar do

 

[Crimson Blue]

Take devaluation out of equation. With current Finance minister, devaluation (at least official) is not an option... What impact do you foresee without letting currency devalue..

You are right. Government and Central Bank of a country have lots of option in these circumstances and scenario can payout in many different ways which no one can predict ahead of time.

However foreign currency reserve is running thin and even if finance minister keeps official USD exchange rate low, the open market rate can still go higher. Currently the open market rate for USD is about PKR 40 higher than official. If this disparity between official and open market exchange rate continues to widen then it can lead to all kind of interesting scenarios, for example this: $45 MCDONALD’S BURGER ONLY IN LEBANON!

 

[Jango]

Default watan e azeez ki taraki ki taraf pehla kadam hoga : DJ ISPR

This press conference will haunt him for the rest of his career.

 

[Olympus81]

Another barometer is people going to gold shops in droves to buy Gold and get rid of the Rs.

Gold can be a good hedge against currency devaluation.

This is happening in Karachi.

 

[epebble]

Another barometer is people going to gold shops in droves to buy Gold and get rid of the Rs.

Gold can be a good hedge against currency devaluation.

This is happening in Karachi.

I was curious nobody has brought this up before. Is there a rush to buy gold? Are gold supplies plentiful and readily available in Karachi?

Interestingly, looking at https://www.darsaal.com/finance/gold-price-in-karachi.html

24k 10 Gram	106,996 Rupees

From: https://www.livepriceofgold.com/new-york-gold-price.html

Gold Rate per Gram in USD

57.37

That gives a 'real' USD/PKR of 186.50 whereas the official rate is 225
Why is gold so undervalued? It would seem like a good bet against inflation.

 

[Olympus81]

I was curious nobody has brought this up before. Is there a rush to buy gold? Are gold supplies plentiful and readily available in Karachi?

Interestingly, looking at https://www.darsaal.com/finance/gold-price-in-karachi.html

24k 10 Gram	106,996 Rupees

From: https://www.livepriceofgold.com/new-york-gold-price.html

Gold Rate per Gram in USD

57.37

That gives a 'real' USD/PKR of 186.50 whereas the official rate is 225
Why is gold so undervalued? It would seem like a good bet against inflation.

ARY Gold

There is a discrepancy here. Local Pakistani rates are higher than International local rates, but despite this, people are looking to buy gold.

 

[epebble]

ARY Gold

There is a discrepancy here. Local Pakistani rates are higher than International local rates, but despite this, people are looking to buy gold.

I am guessing International local rates = NY price times official USD/PKR while Local Pakistani rates = what you have to pay in PK?

If so, real gold rates indicate a USD/PKR of 255, going by the ARY link. This is against official rate 225.

 

[SEOminati]

Bad news for the online freelancers here who receive their earnings in USD or have their earnings in foreign currency accounts.

I don't think any freelancer keeps money in FC accounts. It's more of a hassle. Instead what mostly do is keep their USD intact in their accounts (Wise, Payoneer, etc). And this is what should be done. I earned some back when the USD was 240 I did not withdrew because there was no need of it and now I am waiting for it to get back to where it was at least.

 

[HAIDER]