US dollar reaches record high of Rs121 in interbank market

[Devil Soul]

Doesn't matter. I want @SunilM happy as f*ck

U got a very kind heart, as u want someone to Die happy & that also doing what he love the most ( ref to ur post #11)

 

[SunilM]

Rupee weakens as US dollar hits record high Rs121 in interbank market

• A widening current account deficit and increasing imports have resulted in the surge

The US dollar surged to record high against the Pakistan Rupee in the interbank market on Monday, touching Rs121.

The greenback, which was previously being traded at Rs115.63, increased by Rs5.38, depreciating the already suffering rupee in the interbank market, according to foreign exchange dealers.

A widening current account deficit and increasing imports have resulted in the surge, the experts said, adding that the strengthening dollar will cause trouble for Pakistan’s economy.

In March, the US dollar had recorded Rs4.93 surge, reaching Rs115.50 in the interbank market. Earlier, it had also touched Rs116 in the open market.

The value of the Pakistani Rupee had faced a four per cent decrease in the interbank market due to increasing rate of the dollar.

https://en.dailypakistan.com.pk/bus...r-hits-record-high-rs121-in-interbank-market/

 

[Chhatrapati]

^^ Are you in any way related to Prof Riaz Haq?

 

[indianfighter1999]

a question for pakistanis.... does posh housing society flat rates rises proportional to PKR values??
Seems like a good thing for overseas pakistanis must be enjoying the devaluation.
Even a fresher graduate in Us earns around 70k+ which means even if he/she saves 2000$ its around 2.4 lakh PKR :O

 

[SunilM]

New rupee devaluation shows economic risk before election

The Pakistani rupee slumped 3.8 per cent against the dollar on Monday before slightly recovering in what appeared to be the third currency devaluation in seven months by the central bank, traders said, amid a balance of payments crisis.

The rupee drop threatens to squeeze consumers, coming just days before Eidul Fitr and ahead of the July 25 general election.

The apparent devaluation shows signs of vulnerability in the country's nearly $300 billion economy, as dwindling foreign reserves and a widening current account deficit trigger speculation about going back to the International Monetary Fund for loans for the second time since 2013.

One leading economist, Ashfaque Ahmad Khan, said the interim government that now holds the reins during the election campaign might itself be forced to go to the IMF.

Khan said the interim government needs to take policy decisions to curb imports and increase exports, but so far the caretaker government has not taken enough steps.

“If we rely exclusively on the rupee devaluation to address our balance of payment crises, this will have disastrous consequences,” he said.

The outgoing PML-N government has touted its stewardship of the economy as a reason to bring the party back to power, but foreign reserves are now at a low of two months' worth of imports.

The PML-N policy for years was to support keeping the rupee relatively stable in what was widely considered a managed float, but as the current account deficit widened and foreign reserves dropped to about half their peak, the policy shifted.

Since December, the rupee has fallen by about 14pc.

The rupee closed at 119.85 per US dollar on Monday after opening at 115.63. Earlier in the day, it traded close to 121 per dollar, traders said.

“On Monday the central bank didn't intervene (to support the rupee) and allowed the market to determine the rupee value,” Samiullah Tariq, director of research at Arif Habib Securities, told Reuters. “Pressure of a high current account deficit and dollar demand in the market also contributed to the rupee's fall.”

A spokesman for the State Bank of Pakistan didn't respond to Reuters' request for comment on the talk that the bank had withdrawn support for the rupee, triggering another devaluation.

Withdrawal of support would have the effect of devaluing the currency as the SBP is the most influential player in the thinly traded local foreign exchange market and controls what is widely considered a managed float system.

In December and in March, the rupee was devalued, each time by about 5pc, by the central bank.

Pakistan's economy is expected to expand by close to 6pc this year, the fastest pace in more than a decade, but a widening of the current account deficit has brought new worries.

The current account deficit now stands at $14 billion, around 5.3pc of gross domestic product, an SBP official said.

The economic outlook has been hurt by the fast depletion of foreign currency reserves, which now stand at just over $10bn.

Pakistan is currently in discussions with China for loans to ease pressure on its foreign currency reserves. Over the weekend, the shortage of foreign currency widened the spread at which the rupee is traded in the open market and the interbank market to 4 rupees.

"Whatever has happened again today is the reflection of growing pressure on the balance of payments side," Khan told Reuters.

“It also exposes the outgoing government's claims that they strengthened the economy [and] that they are leaving the economy in good shape. That unfortunately isn't the case.”

https://www.dawn.com/news/1413463/new-rupee-devaluation-shows-economic-risk-before-election

 

[indianfighter1999]

so 14% devaluation from dec 2017, bangladesh will definitely overtake pakistan in total GDP, that will be a shock to pakistani nation. pakistan with much large resource base, access to strategic locations, access to economic superpower like china and oil rich gulf mor population being run over in economy be a minow

 

[SunilM]

so 14% devaluation from dec 2017, bangladesh will definitely overtake pakistan in total GDP, that will be a shock to pakistani nation. pakistan with much large resource base, access to strategic locations, access to economic superpower like china and oil rich gulf mor population being run over in economy be a minow

Yes. With this devaluation, GDP in dollar term would fall less than 300 bn dollars. I think Bangladesh is already ahead. And they are on their way to 7.8% GDP growth this FY. Also, I think PKR will devalue by Rs10 more by August 2018. So DOllar based GDP would reduce further.

Btw, a good discussion on basic of facts by this Pakistani Anchorperson on Economy.

 

[indianfighter1999]

Yes. With this devaluation, GDP in dollar term would fall less than 300 bn dollars. I think Bangladesh is already ahead. And they are on their way to 7.8% GDP growth this FY. Also, I think PKR will devalue by Rs10 more by August 2018. So DOllar based GDP would reduce further.

Btw, a good discussion on basic of facts by this Pakistani Anchorperson on Economy.

10 rupee more sounds a bit much, no matter how much pressure imf puts on pakistan, a 10 rupee jump will make pakistani inflation race like a ferarri.
Not sure they can take that chance, but this devaluation also is a very big headache for pakistan with a souring import bill, high oil price and ever increasing loan servicing.
pakistan with a economy the size of bangladesh keeping an army the size of russia the equations will balance out sooner or later.

 

[SunilM]

I know. But I don't think they have much of a choice now. Their Forex is 10 Billion dollars. If you take out the amount of 6 Billion dollars i.e loan taken by SBP from commercial banks by way of forward contracts, the actual reserves come down to 4 Billion dollars.
The enhanced/additional currency swap facility provided by China has been exhausted by them. Also their imports have crossed the 6 billion dollars mark in May. They have to make a payment of 2.5 billion dollars to IMF/Paris club by end of June. They simply don't have the money. So I am predicting 125-130 by August 2018. Lets see what happens.

P.s.. Orga recommended a hike o Rs 10 in the fuel Prices in the Last week of May. PMLN left the decision to the care taker, which govt has not taken an decision on it. All this add to the fiscal deficit and now with this devaluation, if the fuel prices are kept constant, the fiscal deficit will cross 7% of the GDP this year and thats after excluding circular debt which when added would take it to 11-12% of economy.

 

[indianfighter1999]

I know. But I don't think they have much of a choice now. Their Forex is 10 Billion dollars. If you take out the amount of 6 Billion dollars i.e loan taken by SBP from commercial banks by way of forward contracts, the actual reserves come down to 4 Billion dollars.
The enhanced/additional currency swap facility provided by China has been exhausted by them. Also their imports have crossed the 6 billion dollars mark in May. They have to make a payment of 2.5 billion dollars to IMF/Paris club by end of June. They simply don't have the money. So I am predicting 125-130 by August 2018. Lets see what happens.

only remedy for pakistan is to immediately cut non essential import and any type of luxury import, get itself a bail out and stop any subsidies... and stop taking expensive loans on infrastructure sponser themselves.

 

[sputnik]

2 days back a PDF in-house elite started below thread:
https://defence.pk/pdf/threads/rupe...42-paise-against-dollar.562557/#post-10549469

Tht cartoon is missing on this thread. Speaks volumes abt. Their priorities.
@SunilM @SrNair

 

[Rajesh Singh]

2 days back a PDF in-house elite started below thread:
https://defence.pk/pdf/threads/rupe...42-paise-against-dollar.562557/#post-10549469

Tht cartoon is missing on this thread. Speaks volumes abt. Their priorities.
@SunilM @SrNair

There is big different between .42 paise and 5 rupees.... But people here happy to attack on Sunil. At same time, they were happy to troll about .42 paise fall.

 

[SunilM]

only remedy for Pakistan is to immediately cut non essential import and any type of luxury import, get itself a bail out and stop any subsidies... and stop taking expensive loans on infrastructure sponser themselves.

They already have. They put a RD of 100% to restrict imports but that has not worked since Pakistan is an Import based economy. I dont think an avg Pakistani can afford too much luxury as it is with the value of the PKR and the kind of devaluation its seeing. For example, take Suzuki Meharan. This antiquated prehistoric beast is still sold in Pakistan. And just guess the price.

Suzuki raises prices third time this year: Will Pakistan ever stand up for itself?
"Both of Suzuki Mehran’s variants, the VX and VXR already costlier by Rs 20,000. The price of Mehran’s VX had gone up from Rs 689,000 to Rs 709,000, while Mehran’s VXR price increased from Rs 742,000 to Rs 762,000. The price of Suzuki Ravi had been increased by Rs 20,000 from Rs 706,000 to Rs 726,000. The price of Suzuki Bolan had increased by Rs 20,000 from Rs 764,000 to Rs 784,000. Suzuki Bolan Cargo’s price increased from Rs 730,000 to Rs 750,000."

https://www.globalvillagespace.com/...-year-will-pakistan-ever-stand-up-for-itself/

So the term Luxury for Pakistanis is relative to the local situation in the country. As far as stopping subsidies is concerned, I mean this Chu**a Mufta Ismail released about 200 Billion PKR in the Power sector in the last three months and still the circular debt is 1004 Trillion PKR for the month ending May 2018. Despite increase in price of oil and devaluation of rupee, the price of petroleum products have not changed. You think they have the capacity to take hard decisions? I do have Hope from PTI's guy who is to take care of finance. I don't recall his name.

But as of now the situation is very dire.

 

[Metanoia]

Wow...the H!ndians here seem quite thrilled to say the least.

I reckon at this rate the h!ndian members are gonna surgically remove their bottom two ribs and initiate auto-fellatio due to their unconstrained excitement. @Areesh @lastofthepatriots

 

[Areesh]

Wow...the H!ndians here seem quite thrilled to say the least.

I reckon at this rate the h!ndian members are gonna surgically remove their bottom two ribs and initiate auto-fellatio due to their unconstrained excitement. @Areesh @lastofthepatriots

This is what we call as "OBSESSION".

My thread with more examples of India's obsession with Pakistan

https://defence.pk/pdf/threads/more...strate-indias-obsession-with-pakistan.563079/