Rupee firms against US dollar

[Bilal.]

Sometimes NOT selling or NOT buying is equally effective for manipulation.

No action(not buying or selling) = no intervention = no manipulation = Market forces determining the value.

It's preposterous to claim not buying is currency manipulation, its ridiculous.

 

[VCheng]

No action(not buying or selling) = no intervention = no manipulation = Market forces determining the value.

It's preposterous to claim not buying is currency manipulation, its ridiculous.

Okay, let us look at this another way:

Is it your contention that the present bump in the value of the PKR is not a manipulation but determined by "market forces"?

 

[Bilal.]

Okay, let us look at this another way:

Is it your contention that the present bump in the value of the PKR is not a manipulation but determined by "market forces"?

Yes.

 

[Hyperion]

VC, you an economist? Well. I am. Let me tell you something, it may have been "minor" manipulation in the beginning, however, in absence of constant manipulation (having gigantic cash reserves), market equilibrium is restored almost immediately. What you are seeing here indeed is market-forces at play. Market forces ALWAYS win. Besides, cash injection of USD1.5B, is not that huge to begin with to affect PKR FX/EX.

Okay, let us look at this another way:

Is it your contention that the present bump in the value of the PKR is not a manipulation but determined by "market forces"?

 

[VCheng]

Yes.

So what factors have improved in Pakistan's economy that have had such an affect on the value of the PKR, in your opinion?

VC, you an economist? Well. I am. Let me tell you something, it may have been "minor" manipulation in the beginning, however, in absence of constant manipulation (having gigantic cash reserves), market equilibrium is restored almost immediately. What you are seeing here indeed is market-forces at play. Market forces ALWAYS win. Besides, cash injection of USD1.5B, is not that huge to begin with to affect PKR FX/EX.

The PKR can be bounced around with a few hundreds of millions of dollars easily.

And you are correct, market forces will win. Soon.

 

[Bilal.]

So what factors have improved in Pakistan's economy that have had such an affect on the value of the PKR, in your opinion?

Speculation has come to a grinding halt, inflows improved. Now my turn for the question, show me where was the intervention(manipulation). You need to read up on what currency manipulation actually means.


@Hyperion, those 1.5 billion were not sold off into open market to prop up rupee, if they were only then we can call it manipulation. That never happened.

 

[Hyperion]

Sentiment and confidence matter a lot as well. It's not just pure maths, it rarely works that way.

Speculation has come to a grinding halt, inflows improved. Now my turn for the question, show me where was the intervention(manipulation). You need to read up on what currency manipulation actually means.


@Hyperion, those 1.5 billion were not sold off into open market to prop up rupee, if they were only then we can call it manipulation. That never happened.

 

[Bilal.]

Sentiment and confidence matter a lot as well. It's not just pure maths, it rarely works that way.

And that's exactly what happened, sentiments changed and dollar speculation stopped. But that as our friend VC is calling, is not currency manipulation.

 

[Hyperion]

VC is har-fun-mola!

And that's exactly what happened, sentiments changed and dollar speculation stopped. But that as our friend VC is calling, is not currency manipulation.

 

[Bilal.]

VC is har-fun-mola!

Aren't we all, no matter how much he criticise Pakistan and Pakistanis, this trait is unmistakably all green

 

[VCheng]

show me where was the intervention(manipulation)

So what would you call the sudden "injection" of $1.5 billion dollars?

 

[Tameem]

So what factors have improved in Pakistan's economy that have had such an affect on the value of the PKR, in your opinion?

@VCheng

Before coming of this 1.5 Billion dollars there was a rumors that dollar might touch to Rs. 127-130, for that reason alone exporters as well as Individual hoarders have hold their imbursement with SBP and didn't cash them for months. The moment 1.5 Billion injected in SBP account that bubble burst out of realization that their dream exchange rate wouldn't metalize & all went panic to cash their dollar reserve immediately.

 

[VCheng]

============================

(And cue the personal attacks. How utterly boringly predictable! )

 

[Imran Khan]

wish dollar back to 60

 

[VCheng]

@VCheng

Before coming of this 1.5 Billion dollars there was a rumors that dollar might touch to Rs. 127-130, for that reason alone exporters as well as Individual hoarders have hold their imbursement with SBP and didn't cash them for months. The moment 1.5 Billion injected in SBP account that bubble burst out of realization that their dream exchange rate wouldn't metalize & all went panic to cash their dollar reserve immediately.

These are all signs of market manipulation, not any strength in the fundamentals.