Apparently on PM’s debt relief plea: Pakistan’s dollar bonds plunge

[PradoTLC]

This is a good chance for patriotic overseas Pakistanis to support their country by purchasing the publicly traded government bonds from Pakistan

with the imported gov stripping thier rights votes...

fat chance

 

[Wood]

Celebrate for a possible meagre recovery from an economic and political disaster of his own creation?

The economic issues that were because of violating IMF terms with fuel subsidy was taken care of. The PKR to USD exchange rate had also briefly recovered to 210 at one point. But then the floods have brought a new set of challenges to the economy. Wealthy overseas Pakistanis should not let political partisanship hold them back from helping their homeland in time of natural disasters

 

[TheDarkKnight]

The economic issues that were because of violating IMF terms with fuel subsidy was taken care of. The PKR to USD exchange rate had also briefly recovered to 210 at one point. But then the floods have brought a new set of challenges to the economy. Wealthy overseas Pakistanis should not let political partisanship hold them back from helping their homeland in time of natural disasters

Eh the PTI govt was in IMF program for last 3.5 years. The subsidy was provided from the budget. The jumps in Rs were due to fake news leaked through news channels such as “Saudia ready to give 6 billion, China 3 billions bla bla”. None of that happened. Currency had devalued to new lows even before floods, and of course floods will make it worse.
Anyway if you have that much confidence in this govt then rich Canadian NRIs can invest their money.

 

[PakFactor]

Comon man, the nation is devastated by the floods and is in dire need of funds. Help them by cherity and/or investing in Pakistan. Settle your political score later. No one is going to take money from dollar account and send it abroad as looted money.

It was done once in the past, in the mid to late 1990s, when they snatched dollar accounts. Guess which family was leading the country then? Regardless of the people affected by the floods, no one wants their hard-earned money to purchase someone else's London plots. You live and learn. So, in the end, none trust these goons.

 

[Wood]

Eh the PTI govt was in IMF program for last 3.5 years. The subsidy was provided from the budget. The jumps in Rs were due to fake news leaked through news channels such as “Saudia ready to give 6 billion, China 3 billions bla bla”. None of that happened. Currency had devalued to new lows even before floods, and of course floods will make it worse.
Anyway if you have that much confidence in this govt then rich Canadian NRIs can invest their money.

The subsidy 'provided from budget' is a PTI myth. Please check the most trustworthy Ary news quote IMF leadership accuse Pakistan for violating IMF agreement with the subsidy.

IMF says previous Pakistani govt violated agreement by giving subsidy

DOHA: The International Monetary Fund (IMF) mission chief has said the previous Pakistani government violated the mutual agreement by giving subsidies on

arynews.tv

 

[TheDarkKnight]

The subsidy 'provided from budget' is a PTI myth. Please check the most trustworthy Ary news quote IMF leadership accuse Pakistan for violating IMF agreement with the subsidy.

IMF says previous Pakistani govt violated agreement by giving subsidy

DOHA: The International Monetary Fund (IMF) mission chief has said the previous Pakistani government violated the mutual agreement by giving subsidies on

arynews.tv

It was from the budget, whether that violated IMF agreements or not is a different matter. PTI govt was dealing with same IMF for 3.5 years as I said. Its not the first time it deviated from its IMF provided plan.
Anyway the buck stops on PDM now, and if Canadian NRIs have that much confidence in economic policies of SS then invest in Pakistan as you had recommended overseas Pakistanis.

 

[SaadH]

This is a good chance for patriotic overseas Pakistanis to support their country by purchasing the publicly traded government bonds from Pakistan

Maybe Indian sponsors, supporters and admirers of this PDM traitor bunch and their handlers in Pak Mil-establishment, can help them out, but no overseas Pakistani is going to fork out a penny for these thieving corrupt lot who are being used by Mil-establishment to impose Western colonial agenda with the help Pakistan's mortal enemy India.

 

[Wood]

It was from the budget, whether that violated IMF agreements or not is a different matter. PTI govt was dealing with same IMF for 3.5 years as I said. Its not the first time it deviated from its IMF provided plan.

'From the budget' means that PTI just planned to print PKR or borrow USD to finance the subsidy at a time when Pakistan was already expected to have a 5% Current Account Deficit by credit agencies like Fitch. When Pakistan is out of IMF program, it means that other bilateral and multilateral creditors will not be willing to roll over debts like they usually do. This was the primary reason for BoP crisis that PDM resolved through Miftah's valiant efforts. Please do not be under the illusion that PDM crashed the economy. The PTI administration's betrayal of IMF is what that threw Pakistani economy off its rails. Imran did this with full awareness that he will loose power and the incoming administration will be responsible to deal with the mess.

 

[TheDarkKnight]

'From the budget' means that PTI just planned to print PKR or borrow USD to finance the subsidy at a time when Pakistan was already expected to have a 5% Current Account Deficit by credit agencies like Fitch. When Pakistan is out of IMF program, it means that other bilateral and multilateral creditors will not be willing to roll over debts like they usually do. This was the primary reason for BoP crisis that PDM resolved through Miftah's valiant efforts. Please do not be under the illusion that PDM crashed the economy. The PTI administration's betrayal of IMF is what that threw Pakistani economy off its rails. Imran did this with full awareness that he will loose power and the incoming administration will be responsible to deal with the mess.

Nope no printing of rupees has been done by PTI (except the covid stimulus of 1 trillion - but IMF program was suspended mutually anyway due to covid). PMLN actually paid the circular debt by printing rupees last time. This subsidy specifically was from cutting development schemes and redirecting funds etc.
Investor confidence is reflected by your bonds rate, and currently its at a 50 % discount with record high insurance premium - this is after getting IMF tranche! So PTI maintained better growth, bond rates and reserves by so called betrayal of IMF? Market isn’t stupid, so the reality is that there was no betrayal of any sort. The drop in confidence and disaster in economy is SS and PMLNs own doing.
I have addressed this enough now, the rest of your speculation of ‘IK did this because SS was coming etc’ is not worth responding. You however should follow what you preach and invest in the bonds floated by this Pakistani govt … go ahead.

 

[SaadH]

I don't want to say IK is a conman but it is also difficult for me to say he is not. I don't always agree with Ahsan Iqbal but he is absolutely right that PTI is always deliberately vague about giving any actual number on investments and infrastructure updates that can be traced back to them, because there is nothing there. Whatever numbers IK does give about debt crisis or food prices always come with the caveat that the previous govt is to blame. The first time I got any update about infrastructure under PTI regime was from Ahsan Iqbal.

I find it interesting that people reflect on giving IK their money as a smart move. Given how reckless he was with the economy playing effectively Russian roulette with the exchequer of 220m people, I would be ashamed to admit giving any money to him if I did given how Pakistan's house of cards masquerading as an economy imploded as soon as he left office. People blame PMLN but in what world does it make sense for a country's economy to essentially implode overnight when the PM changes? It shows just how unstable the economy was, it was on a knife edge the entire time. IK's handling of the economy was no less than a bull in a China shop and the current predicament of being one payment away from the brink of default makes it pretty clear that whatever breakthrough progress IK claimed to have made in restoring the health of the economy either never existed or was a complete lie.

I thought CPEC was run by the neutrals, especially when they put Gen. Popa John himself in charge of the whole project. Don't see how IK could have single handedly derailed it and put the current and future Popa John franchisees out to pasture, calling all the shots.

 

[Wood]

This subsidy specifically was from cutting development schemes and redirecting funds etc.
Investor confidence is reflected by your bonds rate, and currently its at a 50 % discount with record high insurance premium - this is after getting IMF tranche! So PTI maintained better growth, bond rates and reserves by so called betrayal of IMF? Market isn’t stupid, so the reality is that there was no betrayal of any sort. The drop in confidence and disaster in economy is SS and PMLNs own doing.
I have addressed this enough now, the rest of your speculation of ‘IK did this because SS was coming etc’ is not worth responding. You however should follow what you preach and invest in the bonds floated by this Pakistani govt … go ahead.

It is IMF Mission chief who said that Imran Khan's subsidy violated IMF terms. What development spending was cut? Please help us understand how these cuts affected fiscal deficit and why the CAD (trade deficit + fiscal deficit + CA surplus including remittances) was projected at 5% by the premier rating agency. Bond yields typically rise if rating agencies cut rating advisory when their dire predictions come true.

As for the repeated jibe asking me to pay for Pakistan, I did not ask PTI members to pay for did I? I say that it is an opportunity for patriotic Pakistanis who cherish the country above partisan political affiliations to step up. As you've noted by now, I'm not one from that group.

 

[TheDarkKnight]

It is IMF Mission chief who said that Imran Khan's subsidy violated IMF terms. What development spending was cut? Please help us understand how these cuts affected fiscal deficit and why the CAD (trade deficit + fiscal deficit + CA surplus including remittances) was projected at 5% by the premier rating agency. Bond yields typically rise if rating agencies cut rating advisory when their dire predictions come true.

First of where is your source that PTI printed rupees for the subsidy. Secondly PTI has suspended violated the program many times. How it would have managed the next review would have been on it (which included the planned fund redirection plus the plan to get cheaper oil from Russia just like India and Saudi Arabia etc.) The comments from IMF chief in the ary link wont contain much context, as PMLN govt was in the review and not PTI. (PS it isnt PTI who has been in power for last 70 years … PMLN/PPP have been for 10 times in total and has the most credit in stacking up loans on Pakistan including CPEC, rental power agreements etx … side track but important to mention)
Here are the details for the planned subsidy:

My View

www.reuters.com

The drop in rupee is not due to the 1.5 bln planned subsidy but due to fall in FDI, remittances, exports, rising fuel bill and many other factors ever since PDM took over. Those numbers speak for themselves including the current ratings.

As for the repeated jibe asking me to pay for Pakistan, I did not ask PTI members to pay for did I? I say that it is an opportunity for patriotic Pakistanis who cherish the country above partisan political affiliations to step up. As you've noted by now, I'm not one from that group.

No you were giving an investment advice here, and these are hard earned assets of people. My properties in Pakistan are already at loss of 30% ever since this regime was imposed on us and you are telling to pump more hard earned money? The current situation shows lack of confidence from internal and external investors, yet you are cheerleading for an economic team that is entirely responsible for the mess. All I said is if you have the confidence you can invest and earn the mouth watering return rates being offered. No one should take your advice if you yourself, for whatever reason, are not willing to follow it.

 

[Wood]

First of where is your source that PTI printed rupees for the subsidy. Secondly PTI has suspended violated the program many times. How it would have managed the next review would have been on it (which included the planned fund redirection plus the plan to get cheaper oil from Russia just like India and Saudi Arabia etc.) The comments from IMF chief in the ary link wont contain much context, as PMLN govt was in the review and not PTI. (PS it isnt PTI who has been in power for last 70 years … PMLN/PPP have been for 10 times in total and has the most credit in stacking up loans on Pakistan including CPEC, rental power agreements etx … side track but important to mention)
Here are the details for the planned subsidy:

My View

www.reuters.com

The drop in rupee is not due to the 1.5 bln planned subsidy but due to fall in FDI, remittances, exports, rising fuel bill and many other factors ever since PDM took over. Those numbers speak for themselves including the current ratings.



No you were giving an investment advice here, and these are hard earned assets of people. My properties in Pakistan are already at loss of 30% ever since this regime was imposed on us and you are telling to pump more hard earned money? The current situation shows lack of confidence from internal and external investors, yet you are cheerleading for an economic team that is entirely responsible for the mess. All I said is if you have the confidence you can invest and earn the mouth watering return rates being offered. No one should take your advice if you yourself, for whatever reason, are not willing to follow it.

I did not say that PTI has printed for subsidy already. But it is common sense that you either borrow USD or print PKR to fund fiscal deficits. You have either misread my comment or have just started to learn these fundamental aspects of administration. Please note that budget is just a plan. You are also side stepping the projected rise of CAD to 5% of GDP under Imran's unsustainable subsidy policy. Imran simply decided to torpedo the country's economy for his mission to wrest political control at any cost. The sudden drop in rupee is because of typical speculation in currency market that will result when your country is staring at a BoP crisis. Imran pushed Pakistan into that crisis with the intention to further knee cap the incoming administration with political dharnas.

Secondly, investments are made based on risk appetite. I will not invest in Pakistan's bonds because I do not think that the investment merits the risk involved. I have no sentimental obligation to tolerate the risk because I'm not a Pakistani. But I think that patriotic Pakistanis will stomach the higher risk for Pakistani bonds because they have sentimental connection to their country that an Indian will never have. So it is for patriotic Pakistanis to decide if it is their country or the cult leader Imran that matters more for them. I only intend to raise the opportunity for their perusal.

 

[TheDarkKnight]

I did not say that PTI has printed for subsidy already. But it is common sense that you either borrow USD or print PKR to fund fiscal deficits. You have either misread my comment or have just started to learn these fundamental aspects of administration. Please note that budget is just a plan. You are also side stepping the projected rise of CAD to 5% of GDP under Imran's unsustainable subsidy policy. Imran simply decided to torpedo the country's economy for his mission to wrest political control at any cost. The sudden drop in rupee is because of typical speculation in currency market that will result when your country is staring at a BoP crisis. Imran pushed Pakistan into that crisis with the intention to further knee cap the incoming administration with political dharnas.

You are entitled to criticize IK for his politics, dont care. But numbers speak for them selves. How PTI would have managed those subsidies plus the IMF program through the planned cuts cannot be known now as they were pushed out of power undemocratically. You had inferred PTI printing rupees but now you are just speculating what PTI might have done instead of the planned cuts, expected tax growth and ALSO the point you missed again - cheaper oil from Russia. The CAD is not due to the 1.5 billion subsidy of PTI, but due to drop in exports, remittances, fdi- whose cumulative loss it self has been +1billion per month - higher fuel prices despite cheaper alternatives available from Russia. There are many more but these are the top few.

Secondly, investments are made based on risk appetite. I will not invest in Pakistan's bonds because I do not think that the investment merits the risk involved. I have no sentimental obligation to tolerate the risk because I'm not a Pakistani. But I think that patriotic Pakistanis will stomach the higher risk for Pakistani bonds because they have sentimental connection to their country that an Indian will never have. So it is for patriotic Pakistanis to decide if it is their country or the cult leader Imran that matters more for them. I only intend to raise the opportunity for their perusal.

So your investment advice is based on sentiment … got it.

 

[Wood]

You are entitled to criticize IK for his politics, dont care. But numbers speak for them selves. How PTI would have managed those subsidies plus the IMF program through the planned cuts cannot be known now as they were pushed out of power undemocratically. You had inferred PTI printing rupees but now you are just speculating what PTI might have done instead of the planned cuts, expected tax growth and ALSO the point you missed again - cheaper oil from Russia. The BOP is not due to the 1.5 billion subsidy of PTI, but due to drop in exports, remittances, fdi- whose cumulative loss it self has been +1billion per month - higher fuel prices despite cheaper alternatives available from Russia. There are many more but these are the top few.


So your investment advice is based on sentiment … got it.

Ah, the myth of cheaper oil from Russia. Do you have any evidence to suggest that there was such a deal? Does Pakistan even have the oil tankers to ship 'em from Russia?

I'm not speculating about money printing. It is a natural turn for ALL governments that run with CAD. You have still not understood that BoP is a result of Imran driving IMF program in jeopardy. This is why I think there is a gap in your understanding about what BOP even means! BoP means that Pakistan will not be able to service a debt that if it was under IMF program would be deferred by other multilateral lenders. Without this key understanding about significance of IMF program, people in this forum wrongly assume that just a $1 billion given by IMF is the significance of the deal. Let me repeat -- the money from IMF is not the real value of IMF deal for countries like Pakistan and Sri Lanka. If you think about it, the money is hardly adequate to cover the billions in debt that the country faces. It is actually the credibility that comes with IMF program that matters! Even if you come back with a circular and repetitive argument for what I've written here, I'm sure that you have now been educated about why developing countries seek IMF. I hope to have appealed to your common sense and rationality in this matter.

Lastly, OFCOURSE my recommendation for investment is based on an emotional appeal for Pakistanis. That is why I predicated my recommendation to 'patriotic' Pakistanis. Not just any overseas Pakistani who would value Imran about all else.