Dont worry by the NS will get loan from Qatar, so it will balanced out.The SBP will have a bigger problem when the repayments come due.
Next UAE, Kuwait, etc
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Dont worry by the NS will get loan from Qatar, so it will balanced out.The SBP will have a bigger problem when the repayments come due.
Dont worry by the NS will get loan from Qatar, so it will balanced out.
Next UAE, Kuwait, etc
Think about what you just said: The costs are incurred in PKR which remain the same, while sales abroad get less USD than before. What happens to the profit? I spend 110 rupees making a shirt. I would have sold it for 1 dollar abroad and covered my costs plus a small profit. Now I will get back only 98 PKR if I sell it for the same dollar. How will I cover my costs? Or should I increase my price to $1.10 to cover my cost, but then who will buy my more expensive shirt?
Getting more loans to repay old ones will always be a losing game once the interest is piled on. There is no "balance" in this game.
Now you are boring.....export orders in place 75-90 days minimum prior from actual delivery dates (means exporters purchase raw material minimum 60-75 days prior Ex-Fty) and before this 1.5B injection dollar is going upward continuously.....I happened to work in textile industry....I know these exporters are earning way too much than their actual cost.
Util then IK will come and we will start blaming him. Thats the plan dear, you should be worried of this wicked person.
Let us agree to disagree and move on. The present bubble will soon burst revealing the manipulation for everyone to see, I have no doubt.
That is exactly why the adverse effect on the exports of this ill-advised bump in PKR value is yet to come in the few months ahead.
IK will remain the next-generation Asghar Khan of Pakistani politics.
Now who is asghar khan?That is exactly why the adverse effect on the exports of this ill-advised bump in PKR value is yet to come in the few months aheadare will remain the next-generation Asghar Khan of Pakistani politics.
you cant manipulate rupees for ever.
and you cant manipulate rupees to gain if you are shoring up reserves.
the rupees is not being manipulated as i dont think so statebank is flooding dollars into market.
its doing the reverse i.e buying dollars from open market that is one of the reason why statebank reserves have surpassed private bank reserves as per news.
ig PML N govt just implement all the MoU they have signed, i will say that will alone be enough to bring growth to 7%
Your claim is baseless because Pakistan open market is only $400 million dollar only
ISLAMABAD:
Pakistan has refused to sell gold worth $2.7 billion, citing national security reasons, as the International Monetary Fund (IMF) pushes Islamabad to convert the precious metal into cash to build foreign currency reserves, revealed the global lender’s report on Friday.
The report, prepared by IMF’s staff led by its Washington-based Mission Chief to Islamabad Jeffrey Franks, also spills the beans on the ‘$1.5 billion gift’ to Pakistan by ‘Saudi Arabia’ – the name Prime Minister Nawaz Sharif’s government has so far refused to officially share with parliament.
According to the report, the State Bank of Pakistan (SBP) holds over 2 million troy ounces of monetary gold, having $2.7 billion value at market rate. It is not counted in gross international reserves as it is not deemed to be liquid by the SBP, says the IMF.
The IMF and Pakistan authorities discussed what steps would be needed to make gold more liquid, the report adds. “However, the (Pakistani) authorities stressed that they have no plans to sell gold and preferred existing arrangements for gold holdings for national security reasons.”
The IMF is pushing Pakistan to sell gold holdings at a time when other countries are buying the commodity as a strategic reserve. The IMF had even sold its surplus gold to India a couple of years ago.
According to analysts, one reason behind the IMF’s insistence could be the country’s inability to build official foreign currency reserves despite being in the $6.7 billion IMF arrangement.
While the IMF hinted in its report that the SBP was not aggressive in building foreign currency reserves, it disclosed that Pakistan’s central bank continued its efforts to build reserves by purchasing dollars from the market.
The SBP purchased $575 million in the last few months till March 17, the report states. The SBP purchases may help stabilise the foreign currency reserves but is considered one of the reasons behind depreciation of the local currency against the US dollar. The rupee started appreciating only after the $1.5 billion grant from Saudi Arabia.
$1.5 billion gift
While the federal government remains reluctant to officially disclose the name of the country that ‘gifted’ Pakistan $1.5 billion despite persistent demand of the opposition, the IMF report identifies it as Saudi Arabia.
A “$750 million grant recently received from Saudi Arabia” will help the Pakistan government in reducing borrowings from the SBP for budget financing, said the IMF.
“Reserve accumulation was also aided by an additional inflow of $750 million from Saudi Arabia,” according to Memorandum of Economic and Financial Policies (MEFP), which is attached with the report and is jointly prepared by Pakistan and the IMF.
In a footnote to the MEFP, Pakistan told the IMF that it received an initial inflow of $750 million on February 19, indicating that it would receive more money.
Strong growth forecast
The IMF confirmed its recent forecast of 3.1 per cent growth this year, which was revised up from an earlier 2.8 per cent. “The overall economic situation in Pakistan is gradually improving,” said Jeffrey Franks.
“That 3.1 per cent may still be a bit on the conservative side, so we see indicators of growth that are relatively strong considering the fiscal adjustment that has taken place,” he told reporters on a conference call.
For the 2014-15 fiscal year, the IMF expected Pakistan’s growth to accelerate to around 3.7 per cent.
The IMF report said the growth was boosted by a stronger manufacturing industry thanks to an easing of Pakistan’s chronic electricity shortages, despite weaknesses in agriculture.
It also said that Prime Minister Nawaz Sharif’s government, despite its commitment to IMF-backed reforms, faced ‘strong’ political resistance to certain structural measures.
Published in The Express Tribune, March 29th, 2014.
Boosting forex reserves: Pakistan refuses to sell $2.7b worth of gold says IMF – The Express Tribune
even though open market is less than 5-10% of total market. state bank did brought some dollars from it over past few months. especially when dollar fell rapidly.
This economic bubble is going to be disastorous for Pak economy.. Because biggest advantage of local currency rise is it reduces inflation (only for negetive trade balance economy, that is import greater than export).. But the reality is.. Your trade balance now is worst than last year.. And the worst thing is exporters are now panic due to dollar devaluation and eventually it will increase the negetive trade balance.. So now the chance of high inflation is there..
Also there is a chance that money inflow which caused this bubble will increase inflation..
Proper investment of this loan is the next prob.. Major portion may be used to repay the existing loans.. Investing in defence, health, education ,allowance for pleasing ordinary people are all bad choices as these are all long term investments without any sudden impact in economy.. Now investin in energy sector and infra development is a choice.. But these are also time consuming and proper utilisation is not sure in pakistan..
Anyway there is no short cut for an economy to grow.. Foreign aids and loans are temporary solutions.. Steady and good growth of economy is the only solution for better future .. Now Navaz pm got enough money to enjoy his term..
This temporary bubble is because of pak getting around 6-8 billion dollars foreign aid for next some months from IMF,KSA and USA.