what is happening to pak rupee will it ever recover ?

[Morpheus]

Importing luxury and non essential items has little to do with stalling the economy. This slowly business is pathetic and shows incompetence. There is nothing slow about the open import of luxury and non essential items that has been taking place from the day PTI stepped in to date. While the country goes to the drain and the Rupee collapses. Slow brains work slowly unfortunately. And PTI has shown it is even more incompetent, albeit less corrupt, than PPP or PMLN.

You are thinking all imports = luxury. That is not the case. We are still importing raw materials as well. Local supply chains are bankrupt for years. No investment in agriculture sector has made it so that our raw material capacity has not kept up with demand. The shortfall in demand are being worked at. Gov has offered interest free loan for farmers to buy new machine, waved off duty and tax on imported machinery, etc Gov is also working with China on getting seeds that are much better, as well as new technology.

https://www.technologytimes.pk/2019/07/03/pakistans-govt-agricultural-policy-china/

https://tribune.com.pk/story/2135754/2-adbs-help-pakistan-revive-agri-growth/

https://nation.com.pk/01-Jun-2020/p...eld-by-using-china-s-intercropping-technology


Again this doesn't happen overnight. Take cotton. For years, nobody invested in it, and as a result the yield, and quality has gone down. As a result cotton was imported. Last year's policy about improvement in agriculture has resulted in overall growth of 2.67% this year. It would have been higher, had it not been for the virus.

http://dunyanews.tv/en/Business/549239-Agriculture-sector-grew-by-2.67-in-2019-20-Economic-Survey

https://profit.pakistantoday.com.pk/2020/01/11/pakistan-misses-cotton-bales-target-by-7m-in-2019/

https://www.dawn.com/news/1525331

 

[BetterPakistan]

Prior to Covid USD to PKR conversion was between 154-55. Current account deficit is reducing rapidly, can it recover usd to pkr conversion to 140 in next 3 fiscal years seeing the trend of current account deficit?

Here are the factors which are effecting Pakistan rupee.
The biggest factor which is effecting the rupee currently is covid19. Most of the business is shut so it seems the best investment in this time is foreign exchange which can be managed sitting from home with out much effort.
Secondly the pandemic has effected the income of middle class but upper class is still enjoying their perks. there are many who received their deliveries of imported Audi in last few months even during the lock down so this implies high income luxury purchases are still happening. The due to lock down the transactions are bit slow people have dollar which they want to convert but the brokers are not available due to lock down they are closed. Those were few of corona virus effects that were making rupee lose value. The availability of dollar is the reason. The price mainly depends on how much dollar is floating in the market than how much is available in the country. The floating dollar is less due to the lock down.
Your reserves are good but exchange rate is depending on the available at pos.

https://twitter.com/x/status/1271321799502913537

Now these reserves are few hundred million dollars less than the start of lock down why cause during the lock down economic and production activity was slow and companies were mostly pushing products in market from their stock which they were holding after the lock down was lifted the raw material was low so companies imported raw material at once which effected the dollar in market now once the production starts and economy gets on road the dollar price will come down and rupee will strengthen a bit.

 

[BHarwana]

Prior to Covid USD to PKR conversion was between 154-55. Current account deficit is reducing rapidly, can it recover usd to pkr conversion to 140 in next 3 fiscal years seeing the trend of current account deficit?

recovering rupee to 140 will help with what?

 

[BetterPakistan]

Reducing inflation, lessening external debt servicing costs, will lessen cost of essential items used in preparation of exporting of Goods, better GDP & for building FX reserves.

recovering rupee to 140 will help with what?

 

[blueazure]

Yes, but not right now. It will take time. Before PMLN used our foreign reserves to keep the dollar price low, giving the false idea that PKR was stronger. It did lot of damage to our economy in long run. What you are seeing are affects of that damage economy. If you want the dollar to fall, we need to fix the economy, which will take time. Once our economy gets strong, you will see the dollar rate falling.

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