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Pakistan’s rupee falls fast as default fears intensify: Financial Times

everything was planned at rupee close to 105/USD and NOT at 180/USD which made all the difference in the world and which is criminal to ignore when criticizing PML.
And did your Mr ingenious Dar take into account what would happen to Rs value long-term when it's artificially set at 105 / USD for years? Would that stay at this place for ever without increasing corresponding exports / FDI?
Dar's policy gave incentives to importers at the cost of exporters. It took Pakistan years to recover from his mess @Wood
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And did your Mr ingenious Dar take into account what would happen to Rs value long-term when it's artificially set at 105 / USD for years? Would that stay at this place for ever without increasing corresponding exports / FDI?
Dar's policy gave incentives to importers at the cost of exporters. It took Pakistan years to recover from his mess @Wood
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If all of my previous posts could not explain to you and if the fact that export powerhouses of the world i.e., China and Japan have REER at 140 and 70 respectively and yet they do superbly does not explain to you why your obsession with REER is pointless; then nothing can be done about it.

I can only confirm that the rupee was perfectly placed throughout the tenure of PML and was in our best interest.

Just a recap on the REER, for your understanding:

Pakistan-REER.jpg


And here is Bangladesh's REER during the same period, which has outpaced us in exports:

Bangladesh-REER.jpg


And that is not it, this is INDIA's REER in the same period, which has outpaced both Pakistan and Bangladesh in exports:

View attachment 854460

Indian-REER.jpg


Strange that India's REER is above 115 and yet it is outpacing Bangladesh which has a REER under 110; I hope you don't blow your little brain.

But let's view the Japanese REER in the same period, which is also exporting at an astonishing rate:

View attachment 854462

Japanese-REER.jpg


So Japan is an export power house despite having a REER of under 80; with your logic, how can it be?

And now for the conclusion, let's look at the Chinese REER:

Chinese-REER.jpg


So, China has a REER of over 125 in the last 10 years and a REER of over 140 in the last 5 years and yet China exports more than many top exporters combined!

I would again advise that you read up on REER, its limitations, its applicability and effect in real world vis-a-vis country to country other than the basket currencies!!


Consider also the GDP growth which was in the negative for the many years under PTI, good going!

You can also ignore that CPEC was under PML Government for which massive imports were undertaken and that all major projects in the past 15 years were started and completed under PML Government which required imports.

As for the GDP, here are the facts under PML and PTI (Source: World Bank and MicroTrends):

View attachment 863437

View attachment 863440

Basically, even at the end of 2021 we were not at the GDP strength where PML left Pakistan!

I hope you enjoyed these graphs too. However, I wonder why people lie and deceit based on political affiliations. Why not be honest and dedicated for the country?

And why not let the man explain to you himself what it is and how it is (I also tried to match the font size of the nonsense article by Dar's opponent Atif that you love to post repeatedly without trying to understand it or the politics behind it):

ISLAMABAD: The leaders of the main opposition Pakistan Muslim League-Nawaz (PML-N) on Thursday presented a dismal picture of the state of economy in the country due to “failed fiscal policies” of the present Pakistan Tehreek-i-Insaf (PTI) government as former finance minister Ishaq Dar stressed the need for having a “serious review” of the economic policy to bring Pakistan out of the economic ‘mess’.

“We need a serious review [of the economic policy]. If we do not do this then we do not have a very bright future,” feared Mr Dar while speaking at a pre-budget seminar, organised by his party in Islamabad, through a video link from London.

PML-N president Shehbaz Sharif presided over the seminar, also through a video link from Lahore.

Mr Dar said that soon after coming into power, they had offered talks on ‘Charter of Economy’, but regretted that no one paid heed to it.

In the seminar, the PML-N leaders lashed out at the present rulers for what they called bringing the country to the verge of disaster and presented a comparison of the economic indicators in 2018 when they left the government and after the three-year rule of the PTI.

Mr Dar, who has been living in self-exile in London, in his nearly 35-minute speech, apprised the participants of the seminar of the five-year performance of the PML-N government between 2013 and 2018. He said that before the 2013 general elections, Pakistan had been declared a “macro-economically instable country”. He said when the PML-N came into power in 2013, the country was facing numerous challenges, including terrorism and power crisis.

Mr Dar said that despite the fact that political instability was created in the country “through sponsored sit-ins”, the PML-N government under the leadership of Nawaz Sharif delivered and fulfilled its promises, including end of loadshedding from the country by the year 2018.


PML-N leaders present ‘dismal picture’ of economic situation
He said it was during the PML-N government that security forces carried Operation Zarb-i-Azb against terrorism. He said the money for the operation was approved through a supplementary grant in 2015 as the operation had been launched in 2014 when the federal budget had already been approved.

Criticising the economic policies of the present government, Mr Dar said the rulers neither knew governance nor had they competence. He alleged that due to failed fiscal policy of the present government, the people had already been robbed of Rs6,000 billion.

The former finance minister said the country’s economy had already been “grounded” even before the Covid-19 pandemic. He said that on the one hand, the government had drastically cut the development budget and, on the other hand, its current expenditures had increased manifold.

Former governor of Sindh Muhammad Zubair criticised the government for its lack of consistency and said that four finance ministers had been changed in three years. He said first finance minister of the PTI government Asad Umer, who had been known as “poster boy” and who had been portrayed as the key reformer for 10 years, was changed within eight months.

PML-N secretary general Ahsan Iqbal castigated the government for cut in the higher education budget. He said the government had not only reduced the higher education budget, in fact, it had abolished the Higher Education Commission. He said the schemes of distributing laptops and scholarships among the students started by the PML-N government had also been abolished by the present government.

Mr Iqbal said the country’s economy was run on sentiments and wondered which investor would turn to Pakistan when Prime Minister Imran Khan at the highest world forums would declare Pakistan as a country of money launderers and corrupts.

Former prime minister Shahid Khaqan Abbasi said that when the PML-N government left in 2018, circular debt of the power sector was Rs1,150bn, which had now reached Rs2,150bn in three years. He predicted that in the next two years, it would touch Rs3,000bn mark.

He said the average power tariff during the PML-N tenure was Rs11.72 per unit, which had now reached over Rs19 per unit in three years. He said when that the PML-N left the government in 2018, the country’s GDP was $315bn and after three-year rule of the PTI, it had now reduced to $296bn.



You may also like to read Dar's take earlier during the first year of Imran's rule:

Pakistan is currently facing one of the worst economic crises in its history. In an exclusive DW interview, former Finance Minister Ishaq Dar accuses the current government of waging "economic terrorism" in Pakistan.

DW: How do you view the Pakistani government's economic policies? Will the IMF's financial bailout package help stabilize the economy?

Ishaq Dar: The incumbent government is incompetent and irresponsible. It actually wasted nine months to conclude its agreement with the IMF.

Read more: Fresh IMF deal a 'political blow' to Pakistan PM Imran Khan

In 2013, when former Prime Minister Nawaz Sharif came to power, we had already worked out our own economic program. The cabinet approved it on July 4, 2013, just days after Sharif took oath. But the current government does not know what to do after assuming power; hence it has wasted time, which has created uncertainty in the market.

I am also not satisfied with the IMF conditions that the government has accepted. This IMF program will contract Pakistan's economic growth, with high inflation and high interest rates. The common people will face the brunt of this.

Food prices have substantially increased in Pakistan in the past few months

But can Prime Minister Imran Khan's government still turn things around?

There are no signs of it. Our government sealed a different kind of agreement with the IMF in 2013, and we successfully completed it in September 2016 — the first time in the country's history. We made sure that the program focused on high growth, and in three years, Pakistan's growth reached close to 6% — the highest in the past 15 years.

At the same time, we brought the inflation level from 12% to 3.6% — the lowest in 40 years. We also managed to lower interest rates. All of these steps activated our economy, which grew from 22,000 billion Pakistan rupees (€129 billion) to 34,000 billion (€200 billion).

On the contrary, our successors have massively devalued the Pakistani rupee in the past nine months. The interest rates have spiked, and inflation has risen from 3.6% to over 9%. At the same time, the prices of essential commodities have increased by 200%.

Did Pakistan really need IMF assistance?

Actually, the current government asked for IMF assistance because its incompetence and a lack of vision caused the economic damage. Just two years ago, Pakistan was praised all over the world for its economic policies. In 2016, PriceWaterhouseCoopers predicted that Pakistan was on its way to join the G20 group of nations in the next few years. So, the current economic mess is our own fault, and Khan's government is to blame for that.

But the ruling Pakistan Tehreek-e-Insaf (PTI) government says that it inherited the economic mess from the Sharif administration, and that it will take some time to fix it…

We only need to compare and look at the international reports on Pakistan's economy a few years ago. It takes hard work and a long time to build economy, but it takes just a few incompetent people and a short time to ruin the economy with the wrong policies. I think Khan's government has waged economic terrorism against the people of Pakistan.

How did you deal with the issue of Pakistan's large defense budget? There were reports that the country's powerful generals demanded that Sharif increase their funding, and his relations with the army turned sour after he refused to do so.

It is a fact that Pakistan is situated in a difficult region and cannot be complacent about its security. Our government always placed importance on national security. We spent a large amount of money to combat terrorism, and our efforts yielded results. But we could only meet the demands with what was available to us. I believe in implementing strict fiscal discipline, and I was supported at the time by Sharif. We didn't compromise on that.

But after coming to power, Imran Khan has reportedly increased the military budget, and according to some media reports, at the cost of the development fund.

Only Khan can tell about the increase in the military budget. It is, however, true that the incumbent government has slashed the development budget. Every government must give equal priority to development and security, as both depend on each other.

Pakistan needs to increase its growth and allocate more funds for development. This is the only way that we can pull people out of poverty and create jobs. In the past nine months, since Khan took charge, more than 1 million people have become jobless.
 
Consider also the GDP growth which was in the negative for the many years under PTI, good going!
Patwari: Imran Khan destroyed economy
Same Patwari: Last two years of Imran Khan govt recorded 6 percent gdp growth
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Lol. No wonder why you are a Dar supporter. Why would Chinese use way expensive Pakistan land route when their alternative sea route is much cheaper and face no security threat like the one we have in Balochistan
Which is why the Chinese stopped and gave a long hard look at the Core Command of PA who they thought were professionals but ended up being overrated real estate snake oil salesmen.
 
If all of my previous posts could not explain to you and if the fact that export powerhouses of the world i.e., China and Japan have REER at 140 and 70 respectively and yet they do superbly does not explain to you why your obsession with REER is pointless; then nothing can be done about it.

I can only confirm that the rupee was perfectly placed throughout the tenure of PML and was in our best interest.

I do not want to get into a long winded discussion, but phir mujhay bhi ajeeb keera to hai hi, so I will just pose two statements/questions:

1- A bit disingenuous to compare Japan and China to Pakistan, no? Supply and demand? They make something the world needs...we do not. Secondly, hasn't the criticism of China always been that they undervalue their currency to keep up exports?



2- If all was going so well, then why were the exports continuously decreasing under Dar, even though we were spending billions each year to keep the exchange rate at a 100?

I've only seen two kinds of people support Ishaq Dar, his own family members (even jo thoray distant hain), and Nawaz Sharif himself. Other than them, even N league itself does not agree with anything Dar does.
 
People just love Dar because he fixed PKR value without fixing the underlying economy.

Patwaris masturbating to dar would never build a house devoid of structural integrity yet cheerlead this *** of a decision from a mentally challenged person who couldn't spell economy even if his name depended on it.
 
I do not want to get into a long winded discussion, but phir mujhay bhi ajeeb keera to hai hi, so I will just pose two statements/questions:

1- A bit disingenuous to compare Japan and China to Pakistan, no? Supply and demand? They make something the world needs...we do not. Secondly, hasn't the criticism of China always been that they undervalue their currency to keep up exports?



2- If all was going so well, then why were the exports continuously decreasing under Dar, even though we were spending billions each year to keep the exchange rate at a 100?

I've only seen two kinds of people support Ishaq Dar, his own family members (even jo thoray distant hain), and Nawaz Sharif himself. Other than them, even N league itself does not agree with anything Dar does.
These stats and arguments weren't really meant for you, they were for a blind political follower.

Anyway, I would say that taking things out of context is quite wily, almost bordering deception. However, knowing well that you do not know the context of the entire argument which has been raging for 2 years I would say between myself and a nonsense imrandoo, I would say that you just jumped in the middle of it and therefore posted the conclusion which you did.

1. Nonetheless, it is indeed disingenuous if not outright stupid to compare Japan, China and Pakistan. Hell, it would be stupid to compare even Bangladesh with Pakistan nowadays. But coming back to my earlier post, the focus was on REER, it's applicability based on examples. Now, this certain nonsense of a member here relies too heavily on REER of a country and I was ripping all his arguments to shreds with proof how REER of 2 export based powerhouses is in the opposite direction to each other. China (and even Japan) have indeed been accused of keeping their currency artificially weak; although I believe this argument has dialed down quite a bit in the past years, especially on Japan. Basically, both countries were maintaining their currencies at artificial levels to their advantage.......I hope you understand where I am going with this.

2. It takes time to setup power plants and it takes time to establish industry, it takes time to acquire confidence of investors and it takes stability in the country for all of those things. Dar was not merely managing the economy and commerce, he was also fighting a war with PTI (Dharna syasat PTI + Qadri etc.), he was also funding Pakistan's war on terror and was doing an overall superb job. Had he completed his tenure and returned for another 5 year stint, I personally believe that we would be in a much better position; our exports would have risen and might have achieved a parity with our imports and we could finally have been in surplus. Maybe I am too big of an idealist!

And now you have seen 3 kinds of people supporting Dar; the 3rd being those who are neither family nor NS but those who are well versed with the economy, commerce, ground realities, diplomacy and well-being of Pakistan and who look at these things apolitically, rationally and logically.
 
Patwari: Imran Khan destroyed economy
Same Patwari: Last two years of Imran Khan govt recorded 6 percent gdp growth
View attachment 866488
Imrandoo unable to understand how 12% of GDP too could be achieved, let alone 6%, on the back of massive borrowing but one which would eventually cripple the economy and the country! And hence cannot understand how much of a difference additional debt of 20,000 BILLION Rupees has made in a mere 4 years along with a mountain of of 2.5 TRILLION Rupees in circular debt from a mere few hundred Billion!!! If Imrandoo and Youthias cannot recognise these these Nuclear Financial Mines; they cannot understand anything!
 
@imrandoo extreme; you obviously cannot begin to answer factually but as you are trained in the art of deception and lies, I am sure you will manufacture something!
 
@imrandoo extreme; you obviously cannot begin to answer factually but as you are trained in the art of deception and lies, I am sure you will manufacture something!

This is your third post using the term imrandoo...please consider this your last warning. Especially when you are fully capable of having a decent conversation, resorting to such terms just reflects on your intellect.
 
Inshallah one day this nation will wake up and take their country back from ruling elite and Corrupt Generals, as long as these two are controlling Pakistan, Pakistan will never progress.
 
This is your third post using the term imrandoo...please consider this your last warning. Especially when you are fully capable of having a decent conversation, resorting to such terms just reflects on your intellect.
I seriously do not wish to use terms like 'imrandoo' or 'youthia' or 'quom-e-youth' etc., and I only very rarely respond and that too when some members repeatedly call me a 'patwari'. However, it is sad that you particularly chose to target me, after a bit of discussion on PTI's performance and your failure to respond logically or factually.

It is also quite sad that you failed to warn all the other users who are calling me a 'patwari'? What makes them right and me wrong? What scale are you using to judge? Please tell me that you warned all users to behave and to not use derogatory words for any member; If not then you are playing favorites and taking sides politically. This makes you unfit to hold your post.

As for the intellectual matter, I can understand your frustration at not being able to respond logically or factually and hence your resort to online threats instead of posting responses. Please do not engage me any further and feel free to ignore my posts to other members.

@Horus @Hyde @Irfan Baloch @jaibi

I would ask the Administrator @Horus and other senior mods, who have been here for many, many years, why do we allow derogatory words from certain members, to the point where they are appreciated even; and who bait other members and then those other members who are baited are then warned/banned etc.?
 
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