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Rupee firms against US dollar

@Lil Mathew, now you are going on another tangent. The growth rate won't jump to high in just one year but it is going to be a healthy 4-4.5%. You are repeating the same thing about export going down without hard stats, let's wait till the end of the final quarter and the stats will come in, otherwise it's all conjectures and hypothesis.

Again the most important thing is not a snapshot of a given moment but the trend. If the trend is in the positive direction then it means things are improving.
@Lil Mathew, now you are going on another tangent. The growth rate won't jump to high in just one year but it is going to be a healthy 4-4.5%. You are repeating the same thing about export going down without hard stats, let's wait till the end of the final quarter and the stats will come in, otherwise it's all conjectures and hypothesis.

Again the most important thing is not a snapshot of a given moment but the trend. If the trend is in the positive direction then it means things are improving.

a stronger currency will inevitably make exports less competitive because the profit will sharpely decrease as dollar depreciation.. That is manufacturing ost will remain same and profit will decr
Dollar-Hoarding Shows Pakistanis Don’t Trust Rupee Rally
By Faseeh Mangi and Khurrum Anis
March 26, 2014 10:49 PM EDT 1 C


A Roadside Money Changer
The Pakistan rupee’s biggest rally in 16 years has been nothing but a tease for Nazim Salim.

Seeing it as an opportunity to settle an old debt in dollars cheaply, he sought out Karachi’s money changers to buy $200. Yet all four traders Salim approached in the kerb market, as it is known to Pakistanis, had the same answer: They had no dollars to sell him.

The hoarding of greenbacks in the kerb market, where a fifth of Pakistan’s foreign-exchange transactions are conducted, shows money changers are unconvinced the local currency’s gains will last. While the rupee has been lifted to a nine-month high by pledges of more than $8 billion in foreign aid, the nation’s economy remains hampered by a deteriorating trade balance, power shortages and a Taliban insurgency in the north.

“With the dollar now in a big, rare retreat, I figured this is the perfect time to end this debt,” Salim said over the sound of vendors hawking tea, biryani and tobacco in the streets below the apartment where he makes and sells dental crowns. “I couldn’t believe it.”

After losing 46 percent of its value over 10 straight years of declines, the rupee has gained 7.5 percent in 2014, touching 97.6 per dollar on March 24, the strongest since June 4, before closing at 97.96 yesterday. Its 7.1 percent advance this month is the best performance among all currencies tracked by Bloomberg.

Forecast Retreat
Standard Chartered Plc and KASB Securities Ltd., the local affiliate of Bank of America Corp., predict the rally will fade. Standard Chartered, which gets about three quarters of its earnings fromAsia, says the rupee will weaken to 104 per dollar by year-end as the effects of the foreign aid wear off. KASB sees a slump to 108 by June.

“Given the speed at which the dollar came down against the rupee, currency exchangers might be sensing it’s temporary,” Raza Jafri, the head of research at Karachi-based brokerage AKD Securities Ltd., said in a March 20 interview. “People think the dollar falling below 100 rupees is a one-off thing caused by a surprise inflow. If I was a currency exchanger, I’d hang on to my dollars because if more inflows don’t come in, it won’t take long for the rupee to slip.”

Starting Up
Pakistan’s troubled economy, blighted by the effects of the decade-long war across the border in Afghanistan, was the reason Salim started his two-person business in his apartment at the end of 2012. After a decade of working low-paid jobs in the dental industry, he moved his young family out to his ancestral village 200 kilometers (124 miles) to the northeast and borrowed start-up capital from a wealthy family friend, avoiding banks because of Islam’s restrictions on interest-bearing loans.

“I figured enough was enough,” Salim, 31, said while preparing a crown for an elderly female patient. “I’d been struggling and, with a son now, I knew I needed more stability, especially financial. I was ready to mortgage my wife’s jewelry and even handed over the papers of my house for the money.”

When it came to getting the dollars to repay the loan, Salim turned to the kerb market that Standard Charteredestimates accounts for 20 percent of currency transactions in the $225 billion economy.

Armed Guards
In a narrow lane closed to cars in Karachi’s upscale Clifton neighbourhood, a dozen of these businesses are watched over by private security guards armed with shotguns and automatics. Nearby, branches of Western Union Co. and HSBC Holdings Plc vie for space with market traders offering traditional sweetmeats and canteens serving tea and dishes of lentils with yoghurt and onion rings.

The money changers’ business has evolved from cash changing hands across rickety stalls to computerized counters behind glass windows, much like the bureaus de change at Karachi’s Jinnah International Airport to the east of downtown.

While the kerb market is still less closely regulated than banks, Pakistan’s central bank last year required money lenders to limit the gap between the prices at which they buy and sell foreign currency to 0.25 rupees -- another reason they’re hoarding dollars. In the end, Salim was forced to repay his friend in rupees, losing more than $55 on the deal.

“Open-market currency dealers aren’t confident the latest rupee rates will be sustained,” Furqan Punjani, an economist for brokerage BMA Capital Management Ltd. in Karachi, said in a March 20 phone interview. “They think these levels are artificial and expect the dollar will rise again because of factors including the current-account deficit.”

Foreign Aid
The International Monetary Fundapproved a $6.78 billion loan for Pakistan in September, while the Gulf Cooperation Council gave the country $1.5 billion of aid this month and the U.S. released $352 million from the Coalition Support Fund earlier this year. That cash, plus the prospect of $500 million from the country’s first overseas debt offering since 2007, is helping support the rupee even as the trade deficit widens.

Pakistan’s monthly trade shortfall has averaged $1.75 billion so far this year, up from $1.63 billion in the whole of 2013, official data show. Gross domestic product is on course to achieve the official target of 4.4 percent growth in the 12 months through June, Finance Minister Dar said this month, after falling short last year.

“The rupee strengthened only because of the unexpected inflow that surprised everybody,” Sayem Ali, a Karachi-based economist at Standard Chartered, said in an interview on March 20. “The rally is more sentiment-driven. Fundamentals are still essentially weak.”

To contact the reporters on this story: Faseeh Mangi in Karachi atfmangi@bloomberg.net; Khurrum Anis in Karachi at kkhan14@bloomberg.net

To contact the editors responsible for this story: Paul Armstrong atparmstrong10@bloomberg.net;
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1396132424209
 
Bro.. In my above post i mean 2014 (jan,feb) trade deficit against the 2013(jan,feb) and not financial year.. As that relevent more in this descussion.. Your trade deficit was an all time high of $2 billion in jan 2014.. The interesting fact is it increased from 1.2 billion in dec 13.. That is 60% increase.. Feb 2014 was also not behind..That is above your source only says the average of 7 months from july 2013 to jan 14 is lower than trade deficit in same period 2012-13..

read your first post again ....specially highlighted points ...... match your figures with attachment ..... I have not need to point out every single distortion and manipulation of figures .....

@Aeronaut , @WebMaster would request you people to take notice of deliberate misinformation propagated my this member without any sources, about economy of Pakistan.
SBP.JPG


first link you posted directed to this page of Express Tribune: Current account: Deficit widens to $1.58b in first half, SBP data shows – The Express Tribune

https://www.google.co.in/url?sa=t&source=web&rct=j&ei=ykI3U5K0M-WCiQeVp4CQBQ&url=http://www.thenews.com.pk/Todays-News-3-233632-Current-account-deficit-widens-to-$205-billion&cd=2&ved=0CCgQFjAB&usg=AFQjCNHtmJ3lnd8u5Ght9adu1Dk_cg_Glg


Second link you posted directed to this article of The News International: Current account deficit widens to $2.05 billion - thenews.com.pk

https://www.google.co.in/url?sa=t&source=web&rct=j&ei=ykI3U5K0M-WCiQeVp4CQBQ&url=http://www.dailytimes.com.pk/business/20-Feb-2014/pakistan-s-c-a-deficit-widens-to-2-05-billion&cd=8&ved=0CDsQFjAH&usg=AFQjCNFFkXlFW7gg9Tux70A6V9HsM_fCvg

Third Link you posted directed to this Article of Daily Times: Pakistan’s C/A deficit widens to $2.05 billion

You know, you are showing typical singe of a troll, in your earlier post you were debating about trade Deficit, but when encountered and asked about the source you are replying with links discussing about Current account deficit .... I would mistaken to assume that you do not understand the difference b/w current account and trade deficit .....
 
current account deficit is bad, i think by switching to coal and improving gas prospectives and rapidly building remittances will address that.
however having said that some economies like india and austrlia for examples had decades of negative current account deficit without any significant effect due to foreign investment and the fact that debt is usually in the private sector.
so you cant say that bad current account deficit will be a disaster, as most of the economies in world have a large deficit but are still flourishing

i think the best indicator for positive fundamentals are GDP,debt and atleast some foreign reserves to avoid panic
all which are showing positive changes, there fore positve reviews from IMF. IMF have upgraded pakistan growth prospectives three times to 3.2 while still saying that this is conservative forecost. i am pretty confident that despite poor performance in agriculture Pakistan will show a growth of 4% of gdp.
the key to govt performance will privitization and foreign investment



The Pitchford thesis

A current account deficit is not always a problem. The Pitchford thesis states that a current account deficit does not matter if it is driven by the private sector. It is also known as the "consenting adults" view of the current account, as it holds that deficits are not a problem if they result from private sector agents engaging in mutually beneficial trade.

A current account deficit creates an obligation of repayments of foreign capital, and that capital consists of many individual transactions. Pitchford asserts that since each of these transactions were individually considered financially sound when they were made, their aggregate effect (the current account deficit) is also sound.

Some feel that this theory has held true for the Australian economy, which has had a persistent current account deficit, yet has experienced economic growth for the past 22 years (1991–2013

Current account - Wikipedia, the free encyclopedia
 
read your first post again ....specially highlighted points ...... match your figures with attachment ..... I have not need to point out every single distortion and manipulation of figures .....

@Aeronaut , @WebMaster would request you people to take notice of deliberate misinformation propagated my this member without any sources, about economy of Pakistan.
View attachment 22659


first link you posted directed to this page of Express Tribune: Current account: Deficit widens to $1.58b in first half, SBP data shows – The Express Tribune


Second link you posted directed to this article of The News International: Current account deficit widens to $2.05 billion - thenews.com.pk


Third Link you posted directed to this Article of Daily Times: Pakistan’s C/A deficit widens to $2.05 billion

You know, you are showing typical singe of a troll, in your earlier post you were debating about trade Deficit, but when encountered and asked about the source you are replying with links discussing about Current account deficit .... I would mistaken to assume that you do not understand the difference b/w current account and trade deficit .....

Dear.. I tried to give a better picture of your economy with deliberately taking account deficit as it includes trade deficit+ loan, aid etc.. Ok.. The link for exactly what I claimed is below..

https://www.google.co.in/url?sa=t&s...MQFjAF&usg=AFQjCNF8yjfip9HllpJCg5ZR8jwZBJcZEQ
 
This year till June-July dollar will be 98 and later further drop to 92 by year end
Heard that by the year end it would be near 80 or below. I am sure GoP will bring in Middle Eastern investors also will be able to Privatize all of the Financial institution by 100% and the rest firms to 30%.
 
read your first post again ....specially highlighted points ...... match your figures with attachment ..... I have not need to point out every single distortion and manipulation of figures .....

@Aeronaut , @WebMaster would request you people to take notice of deliberate misinformation propagated my this member without any sources, about economy of Pakistan.
View attachment 22659


first link you posted directed to this page of Express Tribune: Current account: Deficit widens to $1.58b in first half, SBP data shows – The Express Tribune


Second link you posted directed to this article of The News International: Current account deficit widens to $2.05 billion - thenews.com.pk


Third Link you posted directed to this Article of Daily Times: Pakistan’s C/A deficit widens to $2.05 billion

You know, you are showing typical singe of a troll, in your earlier post you were debating about trade Deficit, but when encountered and asked about the source you are replying with links discussing about Current account deficit .... I would mistaken to assume that you do not understand the difference b/w current account and trade deficit .....

See what trading economics saying....
PAKISTAN BALANCE OF TRADE
Balance of Trade in Pakistan averaged -20527.87 PKR Million from 1957 until 2014, reaching an all time high of 6457 PKR Million in June of 2003 and a record low of -218835 PKR Million in January of 2014. Pakistan runs regular trade deficits primarily due to high imports of energy. Main imports are: fuel (40 percent of total imports); machinery and transport equipment (18 percent) and chemicals (16 percent). Pakistan exports: cotton and knitwear (28 percent of total exports); bed wear, carpets and rugs (8 percent) and rice (8 percent). Main trading partners are United Arab Emirates (10 percent of total exports and 17 percent of imports) and China (9 percent of exports and 15 percent imports). Others include: United States, United Kingdom and Germany. This page provides - Pakistan Balance of Trade - actual values, historical data, forecast, chart, statistics, economic calendar and news. 2014-03-30
 
See what trading economics saying....
PAKISTAN BALANCE OF TRADE
Balance of Trade in Pakistan averaged -20527.87 PKR Million from 1957 until 2014, reaching an all time high of 6457 PKR Million in June of 2003 and a record low of -218835 PKR Million in January of 2014. Pakistan runs regular trade deficits primarily due to high imports of energy. Main imports are: fuel (40 percent of total imports); machinery and transport equipment (18 percent) and chemicals (16 percent). Pakistan exports: cotton and knitwear (28 percent of total exports); bed wear, carpets and rugs (8 percent) and rice (8 percent). Main trading partners are United Arab Emirates (10 percent of total exports and 17 percent of imports) and China (9 percent of exports and 15 percent imports). Others include: United States, United Kingdom and Germany. This page provides - Pakistan Balance of Trade - actual values, historical data, forecast, chart, statistics, economic calendar and news. 2014-03-30

Swithching your stance again n again first you ask about the comparison of Jan & Feb 2013 with Jan -Feb 2014 now posting figures of Jan 2014 only and that too from an inauthentic source ..... read my post again I have posted official Data ..... & 218,835 million PKR is overall Balance of Payment of $ -2.1 Billion for the period of July 2013 till Feb 2014 ......

this is the last time I am posting this figures again:

Balance of trade for the Jan and Feburary 2014 on month to month Basis

SBP BOT.JPG


Balance of Payment and Current A/C Deficit for the period of July 2013 till Jan 2014

BAP-March 2014.JPG


now stop trolling
 
Swithching your stance again n again first you ask about the comparison of Jan & Feb 2013 with Jan -Feb 2014 now posting figures of Jan 2014 only and that too from an inauthentic source ..... read my post again I have posted official Data ..... & 218,835 million PKR is overall Balance of Payment of $ -2.1 Billion for the period of July 2013 till Feb 2014 ......

this is the last time I am posting this figures again:

Balance of trade for the Jan and Feburary 2014 on month to month Basis

View attachment 22710

Balance of Payment and Current A/C Deficit for the period of July 2013 till Jan 2014

View attachment 22711

now stop trolling

Trade gap widens 19% on weak export growth
By Our Correspondent
Published: February 13, 2014
On a month-on-month basis, the trade deficit in
January widened at an alarming pace of 61%
compared to December.
Pakistan’s trade deficit widened by almost a fifth
to $2.1 billion in January over a year ago, as the
country recorded a sluggish export growth of less
than 2% while imports grew about 10%,
according to the national data agency.
The trade deficit – gap between imports and
exports of goods – in January was higher by
19.3% or $336 million against the same month of
previous year,
showed the trade summary
released by the Pakistan Bureau of Statistics
(PBS) on Wednesday.
During the month, imports were $4.2 billion, up
10% or $374 million than purchases made in the
corresponding month of previous year. Exports
grew only 1.9% to $2.1 billion.

January’s import bill was higher than the State
Bank of Pakistan’s foreign currency reserves,
which stood at $3.18 billion, indicating that the
reserves were not sufficient for even one month of
imports.
The terms of trade may turn to the advantage of
exporters only if they are able to fully capitalise
on the trade concessions offered under a 10-year
programme for duty-free access to EU markets,
say analysts.
The EU’s Generalised Scheme of Preferences
(GSP) Plus facility came into effect on the first of
January but the delay in introducing tariff reforms
by the government may undermine the efforts
aimed at increasing exports to the bloc, they fear.
On a month-on-month basis, the trade deficit in
January widened at an alarming pace of 61%
compared to December. The gap was $2.1 billion
in January against $1.3 billion in December,

according to the PBS.
In absolute terms, the deficit was $790 million
higher than that posted in December. Exports
contracted almost 10% while imports rose 16.2%.
Seven-month figure
For seven months (July-January) of the current
fiscal year, the deficit stood at $11.1 billion,

which was 4.5% or $529 million less than the gap
the country recorded in the comparative period of
previous year, according to the PBS.
Import payments totalled $25.8 billion, $200
million or half a percentage point higher than the
payments made in the same period a year ago.
Exports in the seven months remained at $14.7
billion compared to $14.1 billion in the previous
year, showing a growth of 4.7%.
For the current fiscal year, the government has
estimated that exports will increase to $26.6
billion and imports will stand at $43.3 billion, a
gap of $16.7 billion.
After the first review of the $6.7-billion loan
programme, the International Monetary Fund
(IMF) had revised its trade projections for
Pakistan. It revised downward the forecast for
export growth to 8.5% and increased the
projection for import growth to 8%.
According to the IMF, annual trade deficit will be
$16.5 billion, higher by $1.54 billion compared to
its original projection.
Independent economists term contraction in the
trade deficit a sign of sluggish economic activity.
For a developing country like Pakistan, a
reasonable deficit is considered a healthy sign of
growth.
In recent remarks, the IMF has said that
Pakistan’s economy is showing signs of recovery
and its economy can grow 3.1% in this fiscal year.
Published in The Express Tribune, February 13 th ,
2014.
 
@Lil Mathew, for the last time there are 12 months in a year. Stop basing the whole point on one month! Specially when feb numbers are out and they negate what you are saying. What's with you and repeating the same thing over and over.
 
Trade gap widens 19% on weak export growth
By Our Correspondent
Published: February 13, 2014
On a month-on-month basis, the trade deficit in
January widened at an alarming pace of 61%
compared to December.
Pakistan’s trade deficit widened by almost a fifth
to $2.1 billion in January over a year ago, as the
country recorded a sluggish export growth of less
than 2% while imports grew about 10%,
according to the national data agency.
The trade deficit – gap between imports and
exports of goods – in January was higher by
19.3% or $336 million against the same month of
previous year,
showed the trade summary
released by the Pakistan Bureau of Statistics
(PBS) on Wednesday.
During the month, imports were $4.2 billion, up
10% or $374 million than purchases made in the
corresponding month of previous year. Exports
grew only 1.9% to $2.1 billion.

January’s import bill was higher than the State
Bank of Pakistan’s foreign currency reserves,
which stood at $3.18 billion, indicating that the
reserves were not sufficient for even one month of
imports.
The terms of trade may turn to the advantage of
exporters only if they are able to fully capitalise
on the trade concessions offered under a 10-year
programme for duty-free access to EU markets,
say analysts.
The EU’s Generalised Scheme of Preferences
(GSP) Plus facility came into effect on the first of
January but the delay in introducing tariff reforms
by the government may undermine the efforts
aimed at increasing exports to the bloc, they fear.
On a month-on-month basis, the trade deficit in
January widened at an alarming pace of 61%
compared to December. The gap was $2.1 billion
in January against $1.3 billion in December,

according to the PBS.
In absolute terms, the deficit was $790 million
higher than that posted in December. Exports
contracted almost 10% while imports rose 16.2%.
Seven-month figure
For seven months (July-January) of the current
fiscal year, the deficit stood at $11.1 billion,

which was 4.5% or $529 million less than the gap
the country recorded in the comparative period of
previous year, according to the PBS.
Import payments totalled $25.8 billion, $200
million or half a percentage point higher than the
payments made in the same period a year ago.
Exports in the seven months remained at $14.7
billion compared to $14.1 billion in the previous
year, showing a growth of 4.7%.
For the current fiscal year, the government has
estimated that exports will increase to $26.6
billion and imports will stand at $43.3 billion, a
gap of $16.7 billion.
After the first review of the $6.7-billion loan
programme, the International Monetary Fund
(IMF) had revised its trade projections for
Pakistan. It revised downward the forecast for
export growth to 8.5% and increased the
projection for import growth to 8%.
According to the IMF, annual trade deficit will be
$16.5 billion, higher by $1.54 billion compared to
its original projection.
Independent economists term contraction in the
trade deficit a sign of sluggish economic activity.
For a developing country like Pakistan, a
reasonable deficit is considered a healthy sign of
growth.
In recent remarks, the IMF has said that
Pakistan’s economy is showing signs of recovery
and its economy can grow 3.1% in this fiscal year.
Published in The Express Tribune, February 13 th ,
2014.

read your own post draw relevance and post news article ..... BTW we have a tradition to post link against posted news articles

Bro.. In my above post i mean 2014 (jan,feb) trade deficit against the 2013(jan,feb) and not financial year.. As that relevent more in this descussion.. Your trade deficit was an all time high of $2 billion in jan 2014.. The interesting fact is it increased from 1.2 billion in dec 13.. That is 60% increase.. Feb 2014 was also not behind..That is above your source only says the average of 7 months from july 2013 to jan 14 is lower than trade deficit in same period 2012-13..
 
@HRK, what's with this guy and January, of the whole year he is debating based on one months data! Ridiculous!
 
@HRK, what's with this guy and January, of the whole year he is debating based on one months data! Ridiculous!
he continouesly arguing the datas I given about trade deficit in 2014 jan is wrong.. So I go on with that. Understand the situation or read the above posts before commenting bro..
 
continouesly arguing the datas of trade deficit in 2014 jan is wrong.. So I go on that.. Understand the situation or read the above posts before commenting bro..

What are you saying? who is continuously basing his argument on January trade deficit figure? You are...
 
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