Pakistan's Foreign Exchange Reserves

[Neo]

Foreign cos reverse remittances up 11pc ​

Tuesday, April 08, 2008
By Shahzad Anwar

KARACHI: Repatriation of profits from the country rose by 10.9 per cent during the first eight months of fiscal year 2007-08.

According to State Bank of Pakistan (SBP) from July to February 2007-08, companies operating in the country with foreign shareholding sent $556.6 million abroad compared to $501.9 million in the corresponding period of last fiscal year.

The power sector was the major contributor to this outflow as foreign thermal power generating companies repatriated $122 million during July-Feb 2007-08 against $95.7 million in the same period of last year. Foreign communication companies repatriated $84.3 million in first eight months. Foreign oil and gas exploration companies were at third position sending back $60.5 million compared to $35.1 of last year depicting a surge of 72.4 percent.

Though a 15.7 percent negative growth was witnessed in profit and dividend outflow in financial business during aforesaid period but in terms of quantum it is still at higher side with outflow of $52.1 million against $61.8 million of preceding year.

Repatriation of profits by companies making pharmaceuticals & OTC products rose from $4.7 million to $19 million. Chemicals manufacturers sent back $28.4 million compared to $32.1 million. Tobacco and cigarettes sector sent abroad $27.3 million as compared to $15.4 million of last year. Food sector recorded a 9.67 percent decline in profit outflow, which stood at $17.71 million in FY08 compared to $19.60 million in the corresponding period of previous year.

Transport equipment (automobiles) companies repatriated $13.8 million, which was 72.1 percent up from $8 million in matching period of last year. A flight of $48.2 million was recorded in the form of profit and dividend of petroleum refining companies compared to $45.8 million of last year.

Fertiliser sector sent back $2.7 million in terms of profit against $3.8 million of previous fiscal whereas a decline of 1.8 percent was witnessed in the profit outflow of cement companies, which stood at $5.6 million against $5.7 million.

Though, Wall Street Journal last week termed Pakistan a capital magnet, foreign investors seem interested in sectors where repatriation of profit could be ensured easily by taking advantage of liberal policy of allowing foreign companies to send 100 percent profit back to their countries.

Mostly the foreign investors are looking for opportunities in services sector and capital markets where unprecedented profits are being made as compared to manufacturing or agriculture sectors. The foreign investment in capital markets or services sector does not contribute in real economic growth of the country nor does it create new job opportunities.

Foreign cos reverse remittances up 11pc

 

[maqsad]

Maqsad, maybe you missed this article I posted earlier in some other thread:

Ok so if Pakistan becomes a cash magnet then the cash will belong to rich foreigners who buy up the best performing businesses and end up owning them. Which means unless they move to pakistan and settle there they will suck out profits each year(which was why anyone would invest in the first place). So I don't see how this helps pakistan unless the investment is in a strictly export oriented niche--but this is not happening. In fact the exact opposite is happening and foreigners are investing in consumption based ventures.

 

[maqsad]

Foreign cos reverse remittances up 11pc ​

Tuesday, April 08, 2008
By Shahzad Anwar

KARACHI: Repatriation of profits from the country rose by 10.9 per cent during the first eight months of fiscal year 2007-08.

According to State Bank of Pakistan (SBP) from July to February 2007-08, companies operating in the country with foreign shareholding sent $556.6 million abroad compared to $501.9 million in the corresponding period of last fiscal year.

The power sector was the major contributor to this outflow as foreign thermal power generating companies repatriated $122 million during July-Feb 2007-08 against $95.7 million in the same period of last year. Foreign communication companies repatriated $84.3 million in first eight months. Foreign oil and gas exploration companies were at third position sending back $60.5 million compared to $35.1 of last year depicting a surge of 72.4 percent.

Though a 15.7 percent negative growth was witnessed in profit and dividend outflow in financial business during aforesaid period but in terms of quantum it is still at higher side with outflow of $52.1 million against $61.8 million of preceding year.

Repatriation of profits by companies making pharmaceuticals & OTC products rose from $4.7 million to $19 million. Chemicals manufacturers sent back $28.4 million compared to $32.1 million. Tobacco and cigarettes sector sent abroad $27.3 million as compared to $15.4 million of last year. Food sector recorded a 9.67 percent decline in profit outflow, which stood at $17.71 million in FY08 compared to $19.60 million in the corresponding period of previous year.

Transport equipment (automobiles) companies repatriated $13.8 million, which was 72.1 percent up from $8 million in matching period of last year. A flight of $48.2 million was recorded in the form of profit and dividend of petroleum refining companies compared to $45.8 million of last year.

Fertiliser sector sent back $2.7 million in terms of profit against $3.8 million of previous fiscal whereas a decline of 1.8 percent was witnessed in the profit outflow of cement companies, which stood at $5.6 million against $5.7 million.

Though, Wall Street Journal last week termed Pakistan a capital magnet, foreign investors seem interested in sectors where repatriation of profit could be ensured easily by taking advantage of liberal policy of allowing foreign companies to send 100 percent profit back to their countries.

Mostly the foreign investors are looking for opportunities in services sector and capital markets where unprecedented profits are being made as compared to manufacturing or agriculture sectors. The foreign investment in capital markets or services sector does not contribute in real economic growth of the country nor does it create new job opportunities.

Foreign cos reverse remittances up 11pc

Neo, I presume you put this article up to lend some balance to the debate and support my argument with a link because what I just highlighted in red proves what anyone with common sense can see, that at BEST a foreigner will invest in an overseas company not for the welfare of that country but in order to suck as much profit out for himself as is possible. It is up to the Pakistan govt to prevent or discourage this from happening and provide incentives for investors to throw money in businesses that actually help pakistan rather than hurt it. But we see GoP doing the exact opposite.

For instance GoP could do so much to stimulate the local automobile industry and the alternative fuels industry, the local telecommunications manufacturing industry but all they are allowing is for FDI to come in, take over and then long term bleed the economy.

Another bad move is allowing banks to operate aggressively, sucking out profits from the country at scandalous rates. I don't know what is wrong with the government, a govt is supposed to help its people and taxpayers, not sell them off and turn the country into an economic colony. And on top of that you have pakistanis praising GoP for its insane harmful policies.

 

[maqsad]

I am abit confused by these figures. According to this dawn article during the year 1999-2000(when Shopper Aziz did not have a chance to yet work his "magic") the current account deficit was only $500 million per year? And now it will be over $10 billion a year? This sounds like a complete disaster. How will it ever be paid, or is there something wrong with these figures?


Trade deficit outpaces exports -DAWN - Business; April 12, 2008

Trade deficit outpaces exports



By Mubarak Zeb Khan
​

ISLAMABAD, April 11: Trade deficit hit an all-time high of $14.486 billion in the first nine months of the current fiscal year, up by 44.27 per cent from $10.041 billion recorded last year, mainly due to surging oil prices and high import of consumer items.

The deficit exceeded the exports of $13.476 billion.

The gap widened as the import of mobile phones, gold, luxury vehicles, perfumes, cosmetics, bullet proof vehicles etc penetrated the local market due to changing lifestyles.

The import bill of wheat and palm oil witnessed highest-ever increase due to rise in their prices in the international market.

The trade deficit escalated to $13.54 billion in 2006-07 from $1.412 billion in 1999-2000. The trend shows that the trade deficit in the current fiscal year will cross the figure of $20 billion putting an extensive pressure on the balance of payments.

If the non-debt creating inflows -- foreign direct investment, portfolios investment, GDRs and grants -- did not match the gap, the new government will be left with no option but to seek debts from donor agencies and domestic sources for financing the balance of payments.

Official figures released on Friday by the Federal Bureau of Statistics (FBS) showed that the import bill increased by 24.73 per cent to $27.962 billion in July-March 2007-08, against $22.419 billion last year. It witnessed an alarming increase of 45.78 per cent in March 2008 when it stood at $3.823 billion against $2.622 billion in the same month last year.

Exports grew by 8.87 per cent to $13.476 billion in July-March against $12.377 billion last year. The export growth recorded the highest-ever increase of 17.29 per cent in March 2008. This growth was the second straight in a row in the current fiscal year, which is unprecedented because the average growth over the past two years has been six per cent per month.

Analysts said the government should rationalise duty and taxes to regulate imports of the luxury items.

They say government should also focus on the value-added sector and diversify the export base instead of focusing on textile sector which is fetching maximum financial support.

With the rising oil bill, it is expected that the import bill will cross the figure of $36 billion by the end of June 2008. Last year the import bill was around $30 billion.

The export target of $19.2 billion has now become a far cry as the textile exports are steadily on the decline for last few months despite doling out huge subsidies from the national kitty. As the food inflation recorded the highest-ever increase, the government was compelled to slap a ban on export of certain food commodities to avert domestic shortages.

Due to this highest-ever trade deficits in goods and services the current account deficit has also reached an alarming level. The current account deficit will cross over $10 billion by the end of June 2008. Last year the current account deficit was $8.114 billion from over $500 million of 1999-2000.

 

[mujahideen]

Dar hints at continuity in some policies

By Our Correspondent

WASHINGTON, April 12: The new government does not want to indulge in a “blame game” with the previous rulers, says Finance Minister Ishaq Dar, adding that he plans to continue some economic policies of the outgoing government as well.

Talking to Pakistani journalists outside the US State Department, where he met senior US officials, Mr Dar said he does not want to repeat “on American soil” what he said about the previous government in Pakistan.

Before leaving for Washington, the finance minister told the media that the previous government had fudged figures to present a rosy picture while its policies pushed the country into an economic crisis. He also said that today the economy was in a far worse shape than it was in 1999.

But after his meeting with US entrepreneurs and senior officials, he told reporters: “The new government will continue the FDI-linked policies of the previous government.”

Mr Dar claimed that the Sharif government had introduced these policies before it was ousted in 1999 and therefore “there will be continuity in these policies … there will also be a consistency in policies of deregulation and privatisation.”

When reminded that before leaving Islamabad, he had accused the previous government of messing up the economy, the finance minister said: “It is not a blame game.” Asked to compare the economy as it exists now with what it was in 1999, Mr Dar said: “We are not doing comparisons.”

The previous government, he said, should have made fiscal and monetary adjustments where those were necessary to meet both domestically and globally pressure “but due to political expediency in the election year, they did not.”

Dar hints at continuity in some policies -DAWN - Top Stories; April 13, 2008

 

[blain2]

Asked to compare the economy as it exists now with what it was in 1999, Mr Dar said: “We are not doing comparisons.”

Because he can't come up with a good answer. His party left the Pakistani economy in shambles...an experience that the country is bound to repeat under PML-N appointees.

 

[fatman17]

Reserves at year-end will be enough for 4.3 months import

By Sajid Chaudhry

ISLAMABAD: The amount of foreign exchange that the country will have at the end of the current fiscal year will be sufficient to cover import bills only for 4.3 months.

Recent estimates for foreign exchange reserves show Pakistan will have $13.689 billion foreign exchange reserves at the end of the year even after receiving some inflows from abroad during the remaining months of the fiscal.

Latest data released by the State Bank of Pakistan showed that the total liquid foreign reserves held by the country dropped by $142 million to $13.133 billion on April 5, 2008.

The country's foreign exchange reserves were $17.697 billion, which were enough to finance 6.4 months imports at the start of the current fiscal year 2007-08.

However, during July-February period these reserves have witnessed a decline and amounted to $14.059 billion and were able to finance 4.7 months imports of the country. The projection suggests that the country's foreign exchange reserves would decrease further and may touch $13.689 billion by the end of current fiscal and would be able to finance 4.3 months imports.

According to the estimates the current account deficit during the current fiscal year was estimated at $9.671 billion. However, during the period July-February current account deficit has already crossed over to $10.024 billion against the annual budgetary projection of $9.671 billion. Rising current account deficit is expected to touch $14.955 billion and would cause a hit to the tune of over $4 billion to the foreign exchange reserves of the country till the end of current fiscal year 2007-08. The current account deficit would be $5.284 billion more than the anticipated deficit $9.671 billion at the start of the fiscal year 2007-08.

Pakistan's oil import bill, which was estimated at $10 billion at the start of the fiscal year, has now been projected to be around $12 billion due to skyrocketing oil prices in the international market. In Pakistan, fuel imports represent more than 20 percent of its total merchandise imports.

Shortfall in wheat production is also feared and the initial estimates suggest that wheat production of the country to stand at 21.8 million tonnes as against the target of 24 million tonnes set for the current fiscal. Economic Coordination Committee (ECC) in its last meeting has postponed the further wheat import option till the availability of final estimates of the wheat production in the current fiscal.

Possible decision for the import of wheat in the month of May would add more burden on foreign exchange reserves, current account deficit and finally the trade deficit by the end of the current fiscal, a senior official said. Donor community has already highlighted the importance of increase in foreign exchange reserves and pointed out that in Pakistan foreign exchange reserve import cover has been estimated as relatively comfortable for 4 months, however, cautioned that foreign exchange reserves are on a declining trend and suggested that further adjustments are required.

 

[fatman17]

Because he can't come up with a good answer. His party left the Pakistani economy in shambles...an experience that the country is bound to repeat under PML-N appointees.

well said ! its very easy to fool the pakistani public but the people sitting in the IFI's arn't as stupid as Mr. Dar may be assuming.

 

[EagleEyes]

Pakistan's forex reserves rise to $14.48 bln

KARACHI, Sept 24 (Reuters) - Pakistan's foreign exchange reserves rose to $14.48 billion in the week that ended on Sept. 19 compared with $14.36 billion the previous week, the central bank said on Thursday.

Reserves held by the State Bank of Pakistan rose to $10.94 billion from $10.84 billion a week earlier, while those held by commercial banks also edged up to $3.54 billion from $3.52 billion a week earlier, the central bank said in a statement.

Foreign reserves hit a record high of $16.5 billion in October 2007 but fell steadily to $6.6 billion by November last year, largely because of a soaring import bill.

However, an International Monetary Fund emergency loan package of $7.6 billion agreed in November helped avert a balance of payments crisis and shore up reserves.

The IMF, which increased the loan to $11.3 billion in July, has disbursed a total $5.148 billion.

Pakistan's forex reserves rise to $14.48 bln - Forbes.com

 

[Hyde]

give me 12 million dollar of this week and i am ready to shift back to Paksitan forever

 

[nwmalik]

give me 12 million dollar of this week and i am ready to shift back to Paksitan forever

But our politicians are saying,
Give me 12 million dollars and i will leave pakistan.
Not a bad idea. In one year we will get rid of 52 corrupt politicians.
Good investment in pakistan future. Will save billions.

 

[owais.usmani]

But our politicians are saying,
Give me 12 million dollars and i will leave pakistan.
Not a bad idea. In one year we will get rid of 52 corrupt politicians.
Good investment in pakistan future. Will save billions.

If they leave Pakistan forever and do not return after 10 years under some deal, then I am with this plan.

 

[ejaz007]

Pakistan forex reserves surges by 1156 million
Updated at: 1010 PST, Friday, September 25, 2009


KARACHI: Pakistan foreign exchange reserves swelling up process continues, as it was seen recording a significant increase by 1156 million during one week.

State Bank of Pakistan (SBP) data showed that foreign exchange reserves in the country has shot up to $14.47 billion, recording significant increase of $1156 million during the week ending September 19.

State Bank reserves amounted to $10.94 billion, while those with the commercial banks $3.53 billion.

Analysts said that following Pakistan’s international credit rating improvement, foreign investors have went into action in the stock market, which has resulted in the pouring in of forex in the country. Besides, the shrinking trade deficit was also positively impacting on the forex reserves, said the analyst.

Pakistan forex reserves surges by 1156 million

 

[warlock21]

in Todays Time Rise in Forex reserve is a sign of worry coz.... volatility in in financial markets and weakening of USD against asian economies.... as Dollar is now carry trade curreny..... Pak. should learn this from their all whether Friend ... China...in todays Time taking Loan in Dollar terms from Financial Instituitions is good ... rather then Increasing own reserve.

 

[grey boy 2]

either U r Illitrate or Educated Fool....just go to thread "Iran Shift to Euro" on this forum.... and read Pak. members post rather than Indian and US citizens....may be god will mercyful on u.

Whats the matter ? my Economic professor;

Can't handle the truth?

Forex reserves up to $ 276.3 billion

India’s foreign exchange reserves rose by $ 4.4 billion to $ 276.3 billion during the week ended August 28,2009. The rise in reserves was mainly because of the $ 4.82 billion increase in special drawing rights (SDRs). The IMF had increased the SDR allocation for countries last month. This was done to enable countries with liquidity problems to utilise the allocation.
Exim India::News,articles,headlines,shipping,port,trade,indian economy,special,newsletter,regular e-news

Must be really terrible for India ?