Pakistan's forex reserves hit all-time high of $18.25 billion

[foxbat]

Mate, the IMF loan does contribute to the forex reserves of the country. Any inflow of money in gold or foreign currency does

 

[SMC]

The question is how much of it. The primary reason why we got IMF loans for reduce budget deficit and pay off previous loans. Most likely only a small chunk of those loans went to forex reserve.

 

[foxbat]

The question is how much of it. The primary reason why we got IMF loans for reduce budget deficit and pay off previous loans. Most likely only a small chunk of those loans went to forex reserve.

SMC, the loan got used in tasks where had the loan not been there, the money in forex reserves would have been used. Hence that Loan contributed to the existing Forex reserves. So if that 11 billion or so didnt come thru in 2008, the forex reserves would now be standing at 7 biillion or so instead of 18

 

[SMC]

Can't you say that for every single loan that a country gets, then? Subtract loans from forex reserve to get real forex reserve. Pakistan would be around - 40 billion, bharat would be about even, not sure about others.

 

[Hulk]

But what he's discounting is the fact that loans do not go towards forex reserves.

they do, as mentioned in the article itself.

 

[SMC]

Not for the most part, at least, no.

 

[desiman]

But what he's discounting is the fact that loans do not go towards forex reserves.

yes they do, loans are available credit which is part of a country's reserves, his statement is quite clear also, you just dont want to accept it.

 

[SMC]

I've already said about a dozen times or so now. Primarly, they do not go toward forex reserves. Maybe a small portion or so, yes.

 

[PakShah]

So can anyone explain what Forex reserves mean?

Thanks

 

[great]

I've already said about a dozen times or so now. Primarly, they do not go toward forex reserves. Maybe a small portion or so, yes.

Come on. If you don't know, please say so. Half fitted knowledge wouldn't help. IMF loans are given in dollars which can't be used for trade inside Pakistan, so Central bank of Pakistan takes those dollars and exchange them with Pakistani rupees (mostly print new ones since dollar is seen as substitute for gold in markets). So loans go straight into forex reserves of central bank. Hence increase in money supply hence inflation.

 

[Chinese-Dragon]

So can anyone explain what Forex reserves mean?

Thanks

Here you go buddy.

Foreign exchange reserves - Wikipedia, the free encyclopedia

 

[foxbat]

Can't you say that for every single loan that a country gets, then? Subtract loans from forex reserve to get real forex reserve. Pakistan would be around - 40 billion, bharat would be about even, not sure about others.

I think he is referring to the unnatural spurt since 2008 and hence the reference to the IMF package

 

[SMC]

Come on. If you don't know, please say so. Half fitted knowledge wouldn't help. IMF loans are given in dollars which can't be used for trade inside Pakistan, so Central bank of Pakistan takes those dollars and exchange them with Pakistani rupees (mostly print new ones since dollar is seen as substitute for gold in markets). So loans go straight into forex reserves of central bank. Hence increase in money supply hence inflation.

Ah here comes self-proclaimed expert. So tell me then, if it went into forex reserves, where did we get the money for which these loans were mainly meant for? i.e. paying off previous debt or taking care of budget deficit, and even of that it was primarily for paying off previous debt.

Oh wait, we have to pay our debt in USD. So much for the self-proclaimed expert.

 

[RoYaL~GuJJaR]

Congrats to pakistan

 

[great]

Ah here comes self-proclaimed expert. So tell me then, if it went into forex reserves, where did we get the money for which these loans were mainly meant for? i.e. paying off previous debt or taking care of budget deficit, and even of that it was primarily for paying off previous debt.

Oh wait, we have to pay our debt in USD. So much for the self-proclaimed expert.

Yes, they gonna pay interest on the debt. Are you saying entire $11 billion tranche is going to debt repayment. I don't think so. But it was clearly written in the article that 55% of it are loans.