Pakistan’s net international reserves stand at negative $4b

[Last starfighter]

Shukran jaziran nawaz Sharif and.
Mulk Di bund maar deeti

 

[Skull and Bones]

Oh please give the new team some time to fix things.

That message is directed to particular members trolling in Indian economic sections.

 

[Adonis]

The other reason is that FDI levels are very low. If we are lucky we get $2bn FDI a year. I don't know why the CPEC money doesn't show up in FDI figures.

...because it is not an investment...but loan. It must be showing under external debt.

**FDI is Foreign Direct Investment

 

[Śakra]

The other reason is that FDI levels are very low. If we are lucky we get $2bn FDI a year. I don't know why the CPEC money doesn't show up in FDI figures.

Because it’s a loan

 

[Roybot]

A country of 220 Million people with reserves at negative 4 billion dollars.

 

[Hareeb]

the country’s balance of payment crisis isn’t over since its net international reserves are negative $4 billion even after eliminating IMF debt obligations.
Last week, the gross official reserves of SBP were recorded at $8.2 billion against its short-term liabilities which stand around $12.2 billion.

As per the IMF’s definition of Net International Reserves, SBP’s reserves would stand at -$9.7 billion after inclusion of its overall $6 billion obligations.

However, the IMF’s repayments are to be done over a period of coming five years, hence, all the amount cannot be eliminated against the short-term liabilities of SBP.

BS.
This would have been the situation when exports and remittances are considered stagnant while the numbers show an increase of 15% in remittances during first four months of fiscal year ( 21% in October only) and the exports are increasing gradually - include $1 billion tarrif free textile exports to China as well). Furthermore, trade deficit has cut to a half as SBP took strict measures to curb imports.

 

[AyanRay]

Indian friends isn't this reflecting 1991 India?

No, '91 was a completly new experience for us. You guys are now used to this situation.

 

[SunilM]

BS.
This would have been the situation when exports and remittances are considered stagnant while the numbers show an increase of 15% in remittances during first four months of fiscal year ( 21% in October only) and the exports are increasing gradually - include $1 billion tarrif free textile exports to China as well). Furthermore, trade deficit has cut to a half as SBP took strict measures to curb imports.

You are being a sold a lie as far as far as the economy is concerned and successive governments including IK's are playing a part in it. For example lets talk about the foreign exchange reserves. Asad Umar had the audacity to say that the immediate balance of payment crisis has been taken care of, which is a lie and nothing more since all you have received is 1 Billion dollars after 3 trips. And even that 1 Billion dollars has to be returned in 1 year. Now once you go through the articles I setout herein under you will understand the quagmire the economy is in....

Troubles ahead: Balance of payments crisis appears far from over
........
The current gross official $8.2 billion reserves are largely maintained by taking short-term loans from commercial banks and taking Chinese and Saudi deposits under the currency swap arrangements.

As of September this year, the central bank borrowed $7.22 billion from commercial banks under the forward and currency swap arrangements, according to data that SBP released on Wednesday. The central bank was required to return $1.5 billion within one month, $3.2 billion in two months and remaining $2.6 billion up to one year, according to the official data.

In addition to this, SBP owes $3 billion to China, $1 billion to Saudi Arabia and $700 million to other sources, according to the sources. Around $453 million were to be repaid to the IMF in this fiscal year, which will be a direct charge on the SBP reserves.

This has resulted into negative $4 billion foreign currency reserves.

The $7.22 billion loans have been obtained by the central bank from commercial banks under F-25 and F-3 circulars, taking benefits of the foreign currency deposits of Pakistanis as well as foreign nationals, according to the sources in the banking sector.

The loans obtained under F E-25 circular are also shown part of both the central bank and commercial banks’ reserves. This is tantamount to double-booking of the currency reserves. Few months ago, Dr Asfhaque Hasan Khan, now a member of the Economic Advisory Council, had also termed the SBP’s foreign currency swaps deal as double booking. He had suggested that the swaps should have been excluded from the commercial banks’ reserves.

...........

https://tribune.com.pk/story/1856330/2-troubles-ahead-balance-payments-crisis-appears-far/

Do read the full article its a treasure trove of facts. What does it say :

1) That SBP has no money of its own in its account, its all currency swap and loans from commercial banks, which money finally belongs to Individual Depositors. The Actual forex with SBP is 8.2- 7.2 Billion i.e 1 Billion dollars. Thats an amount which will cover import bill of a few days and not even a month.

2) If we include the Commercial loans/ Currency swaps also, The Forex reserves are currently 4 Billion dollars in the negative.

3) The monthly gap i.e CAD is around 1 to 1.5 Billion dollars a month. Which means every month Forex reserves will get reduced by 1 Billion dollars atleast apart from Debt repayment. This apart from the fact that short term liability is around 12 Billion US dollars.

4) The trade Deficit is huge and even after all the devaluation decreased by a measly 1.63 % in the first quarter. Export growth has stagnated to 2 -3 % for the current fiscal which is pathetic considering the start devaluation.

"The country’s trade deficit has recorded at $8.9 billion during July-September period of the ongoing financial year as against $9.01 billion of corresponding period of previous year, showing a minor decline of 1.61 percent."

"Pakistan’s exports have gone up by 4.56 percent to $5.39 billion during first quarter of the current fiscal year."

https://nation.com.pk/11-Oct-2018/trade-deficit-cut-by-1-63pc-in-first-quarter

5) No headway in $1bn China market access package
"Adviser to Prime Minister Abdul Razzak Dawood announced the export package from China after PM Imran Khan made a four-day visit to Beijing and Shanghai during the first week of November.
According to sources familiar with the matter, the ‘market access’ announcement was earlier misunderstood by Pakistan as Beijing’s willingness to allow purchase of goods on state level to extend benefits to the country. Following the PM’s visit to China, Islamabad expected that China will purchase additional surplus quota of wheat, sugar, rice and other agriculture commodities which are currently subject to restrictions.

However, unconfirmed reports claim that the Chinese authorities have informed the government that any package from Beijing will be a part of the second phase of the China-Pakistan free trade agreement (FTA).
https://www.dawn.com/news/1448903

So the Chinese are telling you to give China a favorable FTA if you want additional 1 Billion in trade. And inreturn Chinese will seek an additional 5 Billion. So the trade deficit will only increase. Also show the incompetence of Asad Umar and the who Pakistani economic team or as I was saying they were just lying to the aawam since they had been shouting at the top of their voices before the TRIP of securing billions from Chinese Birader.

6) While they mislead the general public, SBP has dropped the GDP growth to 4 % in FY 19. This is a central bank figure which is a little over optimistic and real growth will be around 3-3.5 % keeping in mind the fact that interest rates have been increased to 10% and will be further increased to 12% as demanded by the IMF.

https://arynews.tv/en/sbp-raises-policy-rate-by-150-stability/

Growth will retard completely due to this apart from the fact that devaluation will stroke inflation which will cross that double figure mark by next month and should settle around 12% which will kill the purchasing power of the general public. Now in this backdrop how will PTI generate 1 crore jobs ? Its next to impossible. Hence IK is telling everyone to indulge in poultry farming.

7) With the devaluation, the economy has contracted to around 230bn, i.e the size of the economy around the early 2000's, with such major contraction and no stability whatsoever in the currency market, The real economy could contract even further which will bring more misery to people.

8) With IMF becoming an inevitable option and the strict conditions imposed by them where development budged it slashed and subsidies reduced further, leave alone building new houses for them, the govt would do well to ensure they can take care of the marginalized most hit by the effects of inflation. For example after having increased gas prices, another increase is sought
IMF conditions: SNGPL requests Ogra to increase gas prices

To fulfill the condition of the International Monetary Fund (IMF), the Sui Northern Gas Pipelines Limited (SNGPL) has requested the Oil and Gas Regulatory Authority (OGRA) to further increase gas prices.

Hike in gas tariff will put burden of Rs91 billion on consumers.

The SNGPL authorities have requested Rs215 and Rs103 per cubic foot hike hike in the prices of gas and liquefied natural gas (LNG) respectively as Rs91 billion are required for the current fiscal year.

The authorities further stated that losses due to gas theft will also be recovered from the consumers.

Ogra will hear SNGPL’s plea on December 10 and if approval is given, new prices will be applicable from 1st July.

https://dunyanews.tv/en/Pakistan/468574-SNGPL-request-Ogra-gas-price-hike-IMF-conditions

 

[Hareeb]

A land snatched with the promises of making it better than India now isn't worth comparing with the likes of Bihar or UP

If South is cut off Indian map, North India is no more better than Pakistan.

 

[Hareeb]

You are being a sold a lie as far as far as the economy is concerned and successive governments including IK's are playing a part in it. For example lets talk about the foreign exchange reserves. Asad Umar had the audacity to say that the immediate balance of payment crisis has been taken care of, which is a lie and nothing more since all you have received is 1 Billion dollars after 3 trips. And even that 1 Billion dollars has to be returned in 1 year. Now once you go through the articles I setout herein under you will understand the quagmire the economy is in....

Troubles ahead: Balance of payments crisis appears far from over
........
The current gross official $8.2 billion reserves are largely maintained by taking short-term loans from commercial banks and taking Chinese and Saudi deposits under the currency swap arrangements.

As of September this year, the central bank borrowed $7.22 billion from commercial banks under the forward and currency swap arrangements, according to data that SBP released on Wednesday. The central bank was required to return $1.5 billion within one month, $3.2 billion in two months and remaining $2.6 billion up to one year, according to the official data.

In addition to this, SBP owes $3 billion to China, $1 billion to Saudi Arabia and $700 million to other sources, according to the sources. Around $453 million were to be repaid to the IMF in this fiscal year, which will be a direct charge on the SBP reserves.

This has resulted into negative $4 billion foreign currency reserves.

The $7.22 billion loans have been obtained by the central bank from commercial banks under F-25 and F-3 circulars, taking benefits of the foreign currency deposits of Pakistanis as well as foreign nationals, according to the sources in the banking sector.

The loans obtained under F E-25 circular are also shown part of both the central bank and commercial banks’ reserves. This is tantamount to double-booking of the currency reserves. Few months ago, Dr Asfhaque Hasan Khan, now a member of the Economic Advisory Council, had also termed the SBP’s foreign currency swaps deal as double booking. He had suggested that the swaps should have been excluded from the commercial banks’ reserves.

...........

https://tribune.com.pk/story/1856330/2-troubles-ahead-balance-payments-crisis-appears-far/

Do read the full article its a treasure trove of facts. What does it say :

1) That SBP has no money of its own in its account, its all currency swap and loans from commercial banks, which money finally belongs to Individual Depositors. The Actual forex with SBP is 8.2- 7.2 Billion i.e 1 Billion dollars. Thats an amount which will cover import bill of a few days and not even a month.

2) If we include the Commercial loans/ Currency swaps also, The Forex reserves are currently 4 Billion dollars in the negative.

3) The monthly gap i.e CAD is around 1 to 1.5 Billion dollars a month. Which means every month Forex reserves will get reduced by 1 Billion dollars atleast apart from Debt repayment. This apart from the fact that short term liability is around 12 Billion US dollars.

4) The trade Deficit is huge and even after all the devaluation decreased by a measly 1.63 % in the first quarter. Export growth has stagnated to 2 -3 % for the current fiscal which is pathetic considering the start devaluation.

"The country’s trade deficit has recorded at $8.9 billion during July-September period of the ongoing financial year as against $9.01 billion of corresponding period of previous year, showing a minor decline of 1.61 percent."

"Pakistan’s exports have gone up by 4.56 percent to $5.39 billion during first quarter of the current fiscal year."

https://nation.com.pk/11-Oct-2018/trade-deficit-cut-by-1-63pc-in-first-quarter

5) No headway in $1bn China market access package
"Adviser to Prime Minister Abdul Razzak Dawood announced the export package from China after PM Imran Khan made a four-day visit to Beijing and Shanghai during the first week of November.
According to sources familiar with the matter, the ‘market access’ announcement was earlier misunderstood by Pakistan as Beijing’s willingness to allow purchase of goods on state level to extend benefits to the country. Following the PM’s visit to China, Islamabad expected that China will purchase additional surplus quota of wheat, sugar, rice and other agriculture commodities which are currently subject to restrictions.

However, unconfirmed reports claim that the Chinese authorities have informed the government that any package from Beijing will be a part of the second phase of the China-Pakistan free trade agreement (FTA).
https://www.dawn.com/news/1448903

So the Chinese are telling you to give China a favorable FTA if you want additional 1 Billion in trade. And inreturn Chinese will seek an additional 5 Billion. So the trade deficit will only increase. Also show the incompetence of Asad Umar and the who Pakistani economic team or as I was saying they were just lying to the aawam since they had been shouting at the top of their voices before the TRIP of securing billions from Chinese Birader.

6) While they mislead the general public, SBP has dropped the GDP growth to 4 % in FY 19. This is a central bank figure which is a little over optimistic and real growth will be around 3-3.5 % keeping in mind the fact that interest rates have been increased to 10% and will be further increased to 12% as demanded by the IMF.

https://arynews.tv/en/sbp-raises-policy-rate-by-150-stability/

Growth will retard completely due to this apart from the fact that devaluation will stroke inflation which will cross that double figure mark by next month and should settle around 12% which will kill the purchasing power of the general public. Now in this backdrop how will PTI generate 1 crore jobs ? Its next to impossible. Hence IK is telling everyone to indulge in poultry farming.

7) With the devaluation, the economy has contracted to around 230bn, i.e the size of the economy around the early 2000's, with such major contraction and no stability whatsoever in the currency market, The real economy could contract even further which will bring more misery to people.

8) With IMF becoming an inevitable option and the strict conditions imposed by them where development budged it slashed and subsidies reduced further, leave alone building new houses for them, the govt would do well to ensure they can take care of the marginalized most hit by the effects of inflation. For example after having increased gas prices, another increase is sought
IMF conditions: SNGPL requests Ogra to increase gas prices

To fulfill the condition of the International Monetary Fund (IMF), the Sui Northern Gas Pipelines Limited (SNGPL) has requested the Oil and Gas Regulatory Authority (OGRA) to further increase gas prices.

Hike in gas tariff will put burden of Rs91 billion on consumers.

The SNGPL authorities have requested Rs215 and Rs103 per cubic foot hike hike in the prices of gas and liquefied natural gas (LNG) respectively as Rs91 billion are required for the current fiscal year.

The authorities further stated that losses due to gas theft will also be recovered from the consumers.

Ogra will hear SNGPL’s plea on December 10 and if approval is given, new prices will be applicable from 1st July.

https://dunyanews.tv/en/Pakistan/468574-SNGPL-request-Ogra-gas-price-hike-IMF-conditions

The sole purpose of IK trips was not to negotiate loans but to attract FDI and tarrif free exports for Pakistani businesses.

 

[Chanakyaa]

Terrible situation. No wonder why the rupee is fast heading towards 200 mark.

This joker of a finance minister had no plans even when it was known that he would be new finance minister. He seemed so confused soon after taking charge.

Just remove him and put Biradar @BHarwana. He will fix it like Magic.

 

[Hareeb]

Arre naa mere dost......the likes of Gujarat and Delhi NCR and 90's Punjab has contributed tremedously to Indias growth story.
At the same time states like Bihar and Harayana are posting astronomical growth rates year on year.

South is the hub. Most of the high-tech businesses are based in South while the North eat much of the remittances sent by South expats.

He followed the same path as NaMo did when joined office back in 2014.
But unfortunately its not the leader who sells its the workforce who are sold and nobody is interested in betting Pakistan hence no investement or minimal investment form just muslim countries.
Try christian Germany or Us or even Japan they'll laugh at you

And I thought Coca Cola, Pepsi, ExxonMobil, VW, Kia, Renault and JW Forland are not based of muslim countries those pledged $billions in FDI.

 

[Chanakyaa]

You are being a sold a lie as far as far as the economy is concerned and successive governments including IK's are playing a part in it. For example lets talk about the foreign exchange reserves. Asad Umar had the audacity to say that the immediate balance of payment crisis has been taken care of, which is a lie and nothing more since all you have received is 1 Billion dollars after 3 trips. And even that 1 Billion dollars has to be returned in 1 year. Now once you go through the articles I setout herein under you will understand the quagmire the economy is in....

Troubles ahead: Balance of payments crisis appears far from over
........
The current gross official $8.2 billion reserves are largely maintained by taking short-term loans from commercial banks and taking Chinese and Saudi deposits under the currency swap arrangements.

As of September this year, the central bank borrowed $7.22 billion from commercial banks under the forward and currency swap arrangements, according to data that SBP released on Wednesday. The central bank was required to return $1.5 billion within one month, $3.2 billion in two months and remaining $2.6 billion up to one year, according to the official data.

In addition to this, SBP owes $3 billion to China, $1 billion to Saudi Arabia and $700 million to other sources, according to the sources. Around $453 million were to be repaid to the IMF in this fiscal year, which will be a direct charge on the SBP reserves.

This has resulted into negative $4 billion foreign currency reserves.

The $7.22 billion loans have been obtained by the central bank from commercial banks under F-25 and F-3 circulars, taking benefits of the foreign currency deposits of Pakistanis as well as foreign nationals, according to the sources in the banking sector.

The loans obtained under F E-25 circular are also shown part of both the central bank and commercial banks’ reserves. This is tantamount to double-booking of the currency reserves. Few months ago, Dr Asfhaque Hasan Khan, now a member of the Economic Advisory Council, had also termed the SBP’s foreign currency swaps deal as double booking. He had suggested that the swaps should have been excluded from the commercial banks’ reserves.

...........

https://tribune.com.pk/story/1856330/2-troubles-ahead-balance-payments-crisis-appears-far/

Do read the full article its a treasure trove of facts. What does it say :

1) That SBP has no money of its own in its account, its all currency swap and loans from commercial banks, which money finally belongs to Individual Depositors. The Actual forex with SBP is 8.2- 7.2 Billion i.e 1 Billion dollars. Thats an amount which will cover import bill of a few days and not even a month.

2) If we include the Commercial loans/ Currency swaps also, The Forex reserves are currently 4 Billion dollars in the negative.

3) The monthly gap i.e CAD is around 1 to 1.5 Billion dollars a month. Which means every month Forex reserves will get reduced by 1 Billion dollars atleast apart from Debt repayment. This apart from the fact that short term liability is around 12 Billion US dollars.

4) The trade Deficit is huge and even after all the devaluation decreased by a measly 1.63 % in the first quarter. Export growth has stagnated to 2 -3 % for the current fiscal which is pathetic considering the start devaluation.

"The country’s trade deficit has recorded at $8.9 billion during July-September period of the ongoing financial year as against $9.01 billion of corresponding period of previous year, showing a minor decline of 1.61 percent."

"Pakistan’s exports have gone up by 4.56 percent to $5.39 billion during first quarter of the current fiscal year."

https://nation.com.pk/11-Oct-2018/trade-deficit-cut-by-1-63pc-in-first-quarter

5) No headway in $1bn China market access package
"Adviser to Prime Minister Abdul Razzak Dawood announced the export package from China after PM Imran Khan made a four-day visit to Beijing and Shanghai during the first week of November.
According to sources familiar with the matter, the ‘market access’ announcement was earlier misunderstood by Pakistan as Beijing’s willingness to allow purchase of goods on state level to extend benefits to the country. Following the PM’s visit to China, Islamabad expected that China will purchase additional surplus quota of wheat, sugar, rice and other agriculture commodities which are currently subject to restrictions.

However, unconfirmed reports claim that the Chinese authorities have informed the government that any package from Beijing will be a part of the second phase of the China-Pakistan free trade agreement (FTA).
https://www.dawn.com/news/1448903

So the Chinese are telling you to give China a favorable FTA if you want additional 1 Billion in trade. And inreturn Chinese will seek an additional 5 Billion. So the trade deficit will only increase. Also show the incompetence of Asad Umar and the who Pakistani economic team or as I was saying they were just lying to the aawam since they had been shouting at the top of their voices before the TRIP of securing billions from Chinese Birader.

6) While they mislead the general public, SBP has dropped the GDP growth to 4 % in FY 19. This is a central bank figure which is a little over optimistic and real growth will be around 3-3.5 % keeping in mind the fact that interest rates have been increased to 10% and will be further increased to 12% as demanded by the IMF.

https://arynews.tv/en/sbp-raises-policy-rate-by-150-stability/

Growth will retard completely due to this apart from the fact that devaluation will stroke inflation which will cross that double figure mark by next month and should settle around 12% which will kill the purchasing power of the general public. Now in this backdrop how will PTI generate 1 crore jobs ? Its next to impossible. Hence IK is telling everyone to indulge in poultry farming.

7) With the devaluation, the economy has contracted to around 230bn, i.e the size of the economy around the early 2000's, with such major contraction and no stability whatsoever in the currency market, The real economy could contract even further which will bring more misery to people.

8) With IMF becoming an inevitable option and the strict conditions imposed by them where development budged it slashed and subsidies reduced further, leave alone building new houses for them, the govt would do well to ensure they can take care of the marginalized most hit by the effects of inflation. For example after having increased gas prices, another increase is sought
IMF conditions: SNGPL requests Ogra to increase gas prices

To fulfill the condition of the International Monetary Fund (IMF), the Sui Northern Gas Pipelines Limited (SNGPL) has requested the Oil and Gas Regulatory Authority (OGRA) to further increase gas prices.

Hike in gas tariff will put burden of Rs91 billion on consumers.

The SNGPL authorities have requested Rs215 and Rs103 per cubic foot hike hike in the prices of gas and liquefied natural gas (LNG) respectively as Rs91 billion are required for the current fiscal year.

The authorities further stated that losses due to gas theft will also be recovered from the consumers.

Ogra will hear SNGPL’s plea on December 10 and if approval is given, new prices will be applicable from 1st July.

https://dunyanews.tv/en/Pakistan/468574-SNGPL-request-Ogra-gas-price-hike-IMF-conditions

Nicely Explained. @Nilgiri

 

[SunilM]

Nicely Explained. @Nilgiri

The sad part is, these facts have to be presented again and again. Nationalism should not blind anyone to facts.

 

[Yaseen1]

when you try to change something in first stage you may decline to low position from where you stand then after some period you begin to rise this is what happening in Pakistan