Pakistan refuses to sell $2.7b worth of gold says IMF

[veekysingh]

Very very true.



Actually it can. I mean there are Laws, during desperate times, Govt can buy such gold using Rupees, so its a win win situation for govt . Read somewhere in pdf.
Govt can get enough gold from Jewellery brands shop outlets themselves directly if such a need arises.

U really think indian housewives would give thr ear rings to the gov. If gov. Ask? I m not really a believer here.

 

[jarves]

what if these commodities r brought by exchanging this gold or by doing trade in local currency.

Yeah that is also possible,it is known as currency swap but both countries should agree for it.

Some examples....

.
"Japan and India on Friday expanded an arrangement for swapping their local currencies against the US dollar"

"The swap arrangement aims to counter any short-term liquidity problems the two countries may face in future."

Japan, India expand currency swap arrangement to $50 billion - Moneycontrol.com

For rupee boost, Govt draws up list of 23 countries for currency swap arrangement | Business Line

Also we paid to Iran by investing the same amount in there infrastrucure for importing oil instead of paying in dollars at the time of sanctions.

Since Pakistan is an Islamic country and enjoys excellent relations with Saudi Arabia i dont know why your gov. hadnt thought about it.

 

[sree45]

yaar then why does it says that india has also imported gold? China in the other hand is importing gold for years now. IMF is just a foolish organization for looting countries.

Well, Indian gold reserves amount to just 8% of it's total forex reserves, but Pakistan holds around 27.5% of it's reserves in gold. That's the reason IMF wants you guys to sell the gold!!

 

[Umair Nawaz]

Yeah that is also possible,it is known as currency swap but both countries should agree for it.

Some examples....

.
"Japan and India on Friday expanded an arrangement for swapping their local currencies against the US dollar"

"The swap arrangement aims to counter any short-term liquidity problems the two countries may face in future."

Japan, India expand currency swap arrangement to $50 billion - Moneycontrol.com

For rupee boost, Govt draws up list of 23 countries for currency swap arrangement | Business Line

Also we paid to Iran by investing the same amount in there infrastrucure for importing oil instead of paying in dollars at the time of sanctions.

Since Pakistan is an Islamic country and enjoys excellent relations with Saudi Arabia i dont know why your gov. hadnt thought about it.

the coming trade b/w Pakistan and india should be also done in local currency or gold exchange.

 

[VCheng]

Pakistan has refused to sell gold worth $2.7 billion, citing national security reasons, as the International Monetary Fund (IMF) pushes Islamabad to convert the precious metal into cash to build foreign currency reserves, revealed the global lender’s report on Friday.

If there is any substance to this story, it can only mean that the financial situation is so bad that confiscating all the private gold holdings in bank lockers is/was being considered at one point, just like the confiscation of dollar accounts several years ago with forced conversion into rupees at an artificially low rate. Here the confiscation could be paid at a low official price rate for gold.

 

[AZADPAKISTAN2009]

Lets assume pakistan sells the $2.7 Billion dollars in gold , we get $2.7 Billion back. We convert that into Rupees.

Great , after 2 months our currency would fall -50% , and the rupees we would have attained would be useless as the value would go down.

The Gold on other hand always increases in price

 

[Rajaraja Chola]

U really think indian housewives would give thr ear rings to the gov. If gov. Ask? I m not really a believer here.

Lol. Definitely no. They will better sell their husbands for it
But I am talking about jewellary shops and their stocks, which I am sure they have in 1000's of tonnes.

Forget about gold owned by individuals. If the govt. gets it's hands on the gold stored in Indian temples. Am sure, we will have the world's largest gold reserves by a loooong margin!!

Very very true...! But Temples will stand up in protest..! Thats their main problem..! Already they are complaining, they are discriminated against..! They are under the control of govt, and they "pay" govt for handling temple affairs while other places are free of such practises.
Govt will not provacate the temples even more.

 

[Thorough Pro]

How come the country with the worlds largest poor can have gold more than the worlds richest countries? give us an indian logic

Very very true.



Actually it can. I mean there are Laws, during desperate times, Govt can buy such gold using Rupees, so its a win win situation for govt . Read somewhere in pdf.
Govt can get enough gold from Jewellery brands shop outlets themselves directly if such a need arises.

 

[Kloitra]

How come the country with the worlds largest poor can have gold more than the worlds richest countries? give us an indian logic

Centuries of accumulation. No other country had ever the affinity towards gold jewellery as India. This are rough estimates:

EXCLUSIVE - India might buy gold from citizens to ease rupee crisis| Reuters

With 31,000 tonnes of commercially available gold in the country - worth $1.4 trillion at current prices - diverting even a fraction of that to refiners would sate domestic demand for the metal. India imported 860 tonnes of gold in 2012.

Now whether or not this is highest in the world is questionable, but you can search if any other country has more.

 

[veekysingh]

How come the country with the worlds largest poor can have gold more than the worlds richest countries? give us an indian logic

Logic is not for foolish. So no indian need to tell u logic.

 

[Nishan_101]

Pakistan has refused to sell gold worth $2.7 billion, citing national security reasons, as the International Monetary Fund (IMF) pushes Islamabad to convert the precious metal into cash to build foreign currency reserves, revealed the global lender’s report on Friday.
The report, prepared by IMF’s staff led by its Washington-based Mission Chief to Islamabad Jeffrey Franks, also spills the beans on the ‘$1.5 billion gift’ to Pakistan by ‘Saudi Arabia’ – the name Prime Minister Nawaz Sharif’s government has so far refused to officially share with parliament.
According to the report, the State Bank of Pakistan (SBP) holds over 2 million troy ounces of monetary gold, having $2.7 billion value at market rate. It is not counted in gross international reserves as it is not deemed to be liquid by the SBP, says the IMF.
The IMF and Pakistan authorities discussed what steps would be needed to make gold more liquid, the report adds. “However, the (Pakistani) authorities stressed that they have no plans to sell gold and preferred existing arrangements for gold holdings for national security reasons.”

The IMF is pushing Pakistan to sell gold holdings at a time when other countries are buying the commodity as a strategic reserve. The IMF had even sold its surplus gold to India a couple of years ago.

According to analysts, one reason behind the IMF’s insistence could be the country’s inability to build official foreign currency reserves despite being in the $6.7 billion IMF arrangement.

While the IMF hinted in its report that the SBP was not aggressive in building foreign currency reserves, it disclosed that Pakistan’s central bank continued its efforts to build reserves by purchasing dollars from the market.

The SBP purchased $575 million in the last few months till March 17, the report states. The SBP purchases may help stabilise the foreign currency reserves but is considered one of the reasons behind depreciation of the local currency against the US dollar. The rupee started appreciating only after the $1.5 billion grant from Saudi Arabia.

$1.5 billion gift

While the federal government remains reluctant to officially disclose the name of the country that ‘gifted’ Pakistan $1.5 billion despite persistent demand of the opposition, the IMF report identifies it as Saudi Arabia.

A “$750 million grant recently received from Saudi Arabia” will help the Pakistan government in reducing borrowings from the SBP for budget financing, said the IMF.

“Reserve accumulation was also aided by an additional inflow of $750 million from Saudi Arabia,” according to Memorandum of Economic and Financial Policies (MEFP), which is attached with the report and is jointly prepared by Pakistan and the IMF.

In a footnote to the MEFP, Pakistan told the IMF that it received an initial inflow of $750 million on February 19, indicating that it would receive more money.

Strong growth forecast

The IMF confirmed its recent forecast of 3.1 per cent growth this year, which was revised up from an earlier 2.8 per cent. “The overall economic situation in Pakistan is gradually improving,” said Jeffrey Franks.

“That 3.1 per cent may still be a bit on the conservative side, so we see indicators of growth that are relatively strong considering the fiscal adjustment that has taken place,” he told reporters on a conference call.

For the 2014-15 fiscal year, the IMF expected Pakistan’s growth to accelerate to around 3.7 per cent.

The IMF report said the growth was boosted by a stronger manufacturing industry thanks to an easing of Pakistan’s chronic electricity shortages, despite weaknesses in agriculture.

It also said that Prime Minister Nawaz Sharif’s government, despite its commitment to IMF-backed reforms, faced ‘strong’ political resistance to certain structural measures.

Boosting forex reserves: Pakistan refuses to sell $2.7b worth of gold says IMF – The Express Tribune

Pakistan should maintain at least in the current scenario some $7 Billion dollars of gold and may be more in future...

 

[45'22']

I read somewhere Indian housewives have more gold (collectively ) than the govts of the US, China, UK, France and India combined.

India contains largest cumulative amount of gold | Gold News

yep,the news seems correct so far
Indian gold accounts for 1/5th of total world gold

 

[Chak Bamu]

Very very true.



Actually it can. I mean there are Laws, during desperate times, Govt can buy such gold using Rupees, so its a win win situation for govt . Read somewhere in pdf.
Govt can get enough gold from Jewellery brands shop outlets themselves directly if such a need arises.

Sorry for OT, but your avatar has more gold than a small country's reserves.....

 

[Rajaraja Chola]

How come the country with the worlds largest poor can have gold more than the worlds richest countries? give us an indian logic

Affinity. Even the most poorer of poor people, should do the Mangalsutra in Gold, ring in Gold for Christians etc. For every marriage its a must, though the qty varies btw rich n poor. Indian temples have the world's largest reserves of gold. Its a cultural thing..! Its my idiocity to try to explain to a Pakistani like you, a logic.

 

[Archie]

i guess the largest gold reserve is in India

Wrong
India has the Highest Private Gold Reserve
most of the 1000 Ton of gold purchased by India each year is purchased by private investors
USA has the highest National Gold Reserve

I guess China will beat US in National Gold Holdings as it liquidates some part of its US debt holdings into Gold which will likely be more acceptable