Erm....you mean China and Saudi Arabia? Also the interest on loans with IMF/world bank are much lower than short term commercial loans or eurobond/sukuk. But they bring with themselves issues of sovereignty.
World Bank puts $250m policy loan for Pakistan on hold
- Thread starter SunilM
- Start date
Erm....you mean China and Saudi Arabia? Also the interest on loans with IMF/world bank are much lower than short term commercial loans or eurobond/sukuk. But they bring with themselves issues of sovereignty.
BHarwana
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I only mean China and interest with Chinese banks is much less to Pakistan than even world Bank, it is only 1% under the new agreement.
Plus Pakistan is shifting to Yuan so that will decrease the Dollar trade deficit as well because Pakistan makes most of the imports from China that will be covered by Yuan loans from China and result in good short term boost to the economy thus it can hold Pakistan until the CPEC effect kicks in all is good for Pakistan.
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shootingstar
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BRICS & AIIB
Indus Pakistan
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Saudia 'Muslim' Arabia will loans us the money. So there
Are you jealous? We don't need no capitalists, we don't need no Athiests, when we have Muslim brothers !
BHarwana
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Announcement:
Moody's: Further depreciation in the Pakistani rupee would pose short-term challenges but affords long-term benefits
Global Credit Research - 09 Jan 2018
Singapore, January 09, 2018 -- Moody's Investors Service says that the Pakistani rupee (PKR) will likely face ongoing depreciation pressures against the US dollar after a 5% downward adjustment last month. If the PKR depreciates markedly further, the country's central bank will face the difficult challenge of anchoring inflation expectations at moderate levels. The government's debt affordability would also likely weaken further.
However, over the longer term, allowing the PKR to reflect currency fundamentals would reduce the drain on Pakistan's (B3 stable) foreign exchange reserves and enhance the sovereign's capacity to absorb shocks to trade and/or capital flows. Moreover, if inflation expectations are anchored and the government's liquidity risks do not rise sharply, currency flexibility would also enhance Pakistan's price competitiveness, given the current overvaluation of the PKR.
Greater exchange rate flexibility would also improve the economy's shock absorption capacity by incentivizing the reallocation of resources between the tradable and non-tradable sectors of the economy.
Moody's analysis is contained in its recently-released report on Pakistan titled "Government of Pakistan - Further currency depreciation would raise financing costs and inflation short term, enhance competitiveness longer term".
Moody's explains that the PKR depreciated around 5% against the USD, with most of the weakening occurring over three trading days between 8 and 12 December 2017. The depreciation came on the back of a long period of broadly unchanged exchange rate, except for a one-day spike in July 2017. Since 12 December 2017, the PKR has remained broadly unchanged at these weaker levels.
Moody's points out that around one-third of Pakistan's government debt is denominated in foreign currency, and further PKR depreciation would increase the country's debt burden, which was equivalent to 68% of GDP at the end of fiscal year 2017. This is higher than the median estimate for B-rated sovereigns of 55% of GDP for 2017.
Moody's says that if the depreciation is limited to 5%, the weakening of the PKR would pose no significant credit implications for the sovereign. However, given the likely evolution of the current account, further depreciation pressures are likely.
In particular, Moody's expects Pakistan's current account deficit to remain around current levels, at 3%-4% of GDP, due to the high import intensity of domestically-driven growth.
NOTE TO JOURNALISTS ONLY: For more information, please call one of our global press information hotlines: New York +1-212-553-0376, London +44-20-7772-5456, Tokyo +813-5408-4110, Hong Kong +852-3758-1350, Sydney +61-2-9270-8141, Mexico City 001-888-779-5833, São Paulo 0800-891-2518, or Buenos Aires 0800-666-3506. You can also email us at mediarelations@moodys.com or visit our web site at www.moodys.com.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Christian Fang
Asst Vice President - Analyst
Sovereign Risk Group
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Marie Diron
Associate Managing Director
Sovereign Risk Group
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Releasing Office:
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
I just contacted Moody's for Indians to make you all go silent with you propaganda the phone number is there please call them to confirm it.
Moody's: Further depreciation in the Pakistani rupee would pose short-term challenges but affords long-term benefits
Global Credit Research - 09 Jan 2018
Singapore, January 09, 2018 -- Moody's Investors Service says that the Pakistani rupee (PKR) will likely face ongoing depreciation pressures against the US dollar after a 5% downward adjustment last month. If the PKR depreciates markedly further, the country's central bank will face the difficult challenge of anchoring inflation expectations at moderate levels. The government's debt affordability would also likely weaken further.
However, over the longer term, allowing the PKR to reflect currency fundamentals would reduce the drain on Pakistan's (B3 stable) foreign exchange reserves and enhance the sovereign's capacity to absorb shocks to trade and/or capital flows. Moreover, if inflation expectations are anchored and the government's liquidity risks do not rise sharply, currency flexibility would also enhance Pakistan's price competitiveness, given the current overvaluation of the PKR.
Greater exchange rate flexibility would also improve the economy's shock absorption capacity by incentivizing the reallocation of resources between the tradable and non-tradable sectors of the economy.
Moody's analysis is contained in its recently-released report on Pakistan titled "Government of Pakistan - Further currency depreciation would raise financing costs and inflation short term, enhance competitiveness longer term".
Moody's explains that the PKR depreciated around 5% against the USD, with most of the weakening occurring over three trading days between 8 and 12 December 2017. The depreciation came on the back of a long period of broadly unchanged exchange rate, except for a one-day spike in July 2017. Since 12 December 2017, the PKR has remained broadly unchanged at these weaker levels.
Moody's points out that around one-third of Pakistan's government debt is denominated in foreign currency, and further PKR depreciation would increase the country's debt burden, which was equivalent to 68% of GDP at the end of fiscal year 2017. This is higher than the median estimate for B-rated sovereigns of 55% of GDP for 2017.
Moody's says that if the depreciation is limited to 5%, the weakening of the PKR would pose no significant credit implications for the sovereign. However, given the likely evolution of the current account, further depreciation pressures are likely.
In particular, Moody's expects Pakistan's current account deficit to remain around current levels, at 3%-4% of GDP, due to the high import intensity of domestically-driven growth.
NOTE TO JOURNALISTS ONLY: For more information, please call one of our global press information hotlines: New York +1-212-553-0376, London +44-20-7772-5456, Tokyo +813-5408-4110, Hong Kong +852-3758-1350, Sydney +61-2-9270-8141, Mexico City 001-888-779-5833, São Paulo 0800-891-2518, or Buenos Aires 0800-666-3506. You can also email us at mediarelations@moodys.com or visit our web site at www.moodys.com.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Christian Fang
Asst Vice President - Analyst
Sovereign Risk Group
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Marie Diron
Associate Managing Director
Sovereign Risk Group
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Releasing Office:
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
I just contacted Moody's for Indians to make you all go silent with you propaganda the phone number is there please call them to confirm it.
US carries maximum leverage in international lending organisations like WB, IMF, ADB. They decide to which countries, these low interests loans should be sanctioned too.
Unfortunately for Pakistan, it runs on debt. Indirectly loans from one lending organisation are used to pay off previous loans.
If future loans can not be secured(with US tightening economic screws). With $85 Billion in foreign loans to be repaid, Pakistan's economy will follow a familiar spiral.
Firstly Its Forex reserves will start depleting.
Secondly Pakistan government will have to divert funds from development, defense , education, health etc for debt servicing.
And in the worst case scenario, Pakistan might have to declare bankruptcy and default on its loans.
Already twice in 21st century, Pakistan has come pretty close to defaulting. The first time was in 2000-2001 when Pakistan was under US nuclear sanctions, second time was in 2008, when oil prices had soared.
Unfortunately for Pakistan, it runs on debt. Indirectly loans from one lending organisation are used to pay off previous loans.
If future loans can not be secured(with US tightening economic screws). With $85 Billion in foreign loans to be repaid, Pakistan's economy will follow a familiar spiral.
Firstly Its Forex reserves will start depleting.
Secondly Pakistan government will have to divert funds from development, defense , education, health etc for debt servicing.
And in the worst case scenario, Pakistan might have to declare bankruptcy and default on its loans.
Already twice in 21st century, Pakistan has come pretty close to defaulting. The first time was in 2000-2001 when Pakistan was under US nuclear sanctions, second time was in 2008, when oil prices had soared.
BHarwana
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Pakistan can pay the debt don't worry China is helping Pakistan plus China is building most of the infrastructure that was needed under CPEC. But How is India going to pay it's debt and manage such a large Army because India is not doing well.
shootingstar
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Saudia 'Muslim' Arabia will loans us the money. So there
Are you jealous? We don't need no capitalists, we don't need no Athiests, when we have Muslim brothers !
Brother why would I be unhappy if a Muslim helps another Muslim. Are you crazy? I fully support it and wish it happens.
Indian economy is 9 times the sizes of Pakistan economy and for last one and half decade has growth rate 2-3 times that of Pakistan's.
However Indian defence budget is only 6 times greater than Pakistan's.
China is giving you loans for building infrastructure which it would require to sustain their corridor through Pakistan. They are not going to give you loans for Disaster management or even debt servicing.
BHarwana
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Can you tell me why is India cancelling most of it's Navy projects which it desperately needs it Indian has enough money?
India is currently duud due to extensive military spending. the load of Past projects is crippling Indian advance to military modernization. So having no money Indian has to cancel most of it's projects.
Indus Pakistan
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If you factor the 7 times larger population the differance is neglible.
duhastmish
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when will cpec start? i heard that will solve most problems.
pakistan should wait few months and thrn may be they can provide loan to world nank.
pakistan should wait few months and thrn may be they can provide loan to world nank.
BHarwana
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offense is the best defense talk about Indian economy and these noobs have nothing to defend because they are literally out of money for upgrading their Military. they are canceling 80% of the procurement projects.
N.Siddiqui
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How it is 9 times bigger than Pakistan, check the nominal GDP figures...2.45 trillion and 315 billion for India and Pak. It makes Indian economy about 7.6 times bigger than Pakistan. Parity figure in PPP is not the real nominal figures.
Indus Pakistan
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What the Indians do, I notice is brag about positive fruits of being so populous. India has nearly seven, yes 7 times more people then Pakistan at nearly 1.4 billion. This simple means the aggregate figures can be impressive even by European standards.
But the other side of coin is always overlooked. Who has the largest number of hungry, homeless, no sanitation etc in the world? India. The negatove aspects of being so populous even make Sub Sahara Africa look like a utopia. The truth is per capita figures in India are nothing to brag about.
One Indian state alone - Utter Pradesh has about the same population as Pakistan. And it is one of nearly 30 other states.
