Bangladesh will show real 19bn$ foreign reserve now after IMF force to do so

[mb444]

An interesting question is, will SBP liquidate these reserves before defaulting or default while preserving the reserves, if and when it comes to it? The costs of default are higher than loss of gold reserves, but the psychology of gold is such that SBP may default first instead of liquidating its reserves. BTW, though it is a lot of gold, it is only $4 Billion. Not a lot for a country of Pakistan's size.

That is the only thing that pakistan has left. They are already in default. The selloff will occur soon and rapidly and the total repayment for debts PK has to make this year is $22b. Not all loans can be refinanced and creditors would be unwilling with its reduced credit rating.

As you said its less than $4b in value so it is not a solution. I would probably take the impact of default and keep the reserves. PK and its people are used to economic mismanagement and regular defaults.

 

[epebble]

Year ago Pakistan was near $30 Billion. More than your several times higher. Your several times higher will go poof in matter of months.

In a healthy well-functioning economy, there is no need to accumulate huge reserves. Reserve is more like a bank balance used for ordinary transactions over a period of few months. Anything larger is usually invested in wealth creating assets. Hence, this preoccupation with reserves is a meaningless yardstick just as wealth is not normally measured by the size of your bank account. Truly wealthy people become so by investing in wealth creating assets (except those who inherit it or win a lottery). Here is a dirty little secret: U.S. has no reserves at all, in fact we are in hole for 30 trillion. But I don't see too many people crying from morning to night over that.

 

[Imran Khan]

BD trolls started bashing pakistan rather shed some light on 19bn$ and how its happened .

@ThunderCat and @Khan_21 look here hypocracy .as soon as you put your feet on their tails they start barking pakistan even pakiatan have nothing to do with thread.

 

[Abid123]

@Imran Khan Bro you seem obsessed with Bangladesh.

 

[epebble]

That is the only thing that pakistan has left. They are already in default. The selloff will occur soon and rapidly and the total repayment for debts PK has to make this year is $22b. Not all loans can be refinanced and creditors would be unwilling with its reduced credit rating.

As you said its less than $4b in value so it is not a solution. I would probably take the impact of default and keep the reserves. PK and its people are used to economic mismanagement and regular defaults.

That is what I thought SBP/GOP will do. Default is painful over next decade or two. Loss of reserves is no more a loss than loss of milk from my fridge. When I empty the can, I just run out and get another gallon. If I have $4 billion, I can get 65 tons of bullion in a day or so.

 

[mb444]

In a healthy well-functioning economy, there is no need to accumulate huge reserves. Reserve is more like a bank balance used for ordinary transactions over a period of few months. Anything larger is usually invested in wealth creating assets. Hence, this preoccupation with reserves is a meaningless yardstick just as wealth is not normally measured by the size of your bank account. Truly wealthy people become so by investing in wealth creating assets (except those who inherit it or win a lottery). Here is a dirty little secret: U.S. has no reserves at all, in fact we are in hole for 30 trillion. But I don't see too many people crying from morning to night over that.

Reserves are part of a countries money supply that can only be used for external trade.

Huge reserves just sits there doing nothing, increasing the overall money supply.

Developed nations dictate international trade and have imposed condition that their currency needs to be used hence this artificial crisis.

USA/UK simply prints money unfortunately BD or PK can not do that it must earn every $ through trade for their imports.

 

[Imran Khan]

@Imran Khan Bro you seem obsessed with Bangladesh.

they seems to obssesed with paksitan bashing i am just putting them back on auqat

 

[epebble]

Reserves are part of a countries money supply that can only be used for external trade.

Huge reserves just sits there doing nothing, increasing the overall money supply.

Developed nations dictate international trade and have imposed condition that their currency needs to be used hence this artificial crisis.

USA/UK simply prints money unfortunately BD or PK can not do that it must earn every $ through trade for their imports.

That is true. But if the country is running well, reserves needed for a few months of imports should be OK. I would think for Pakistan, that would be $20 or 30 billion. But what is far more important is the economic engine should be capable of producing enough tradeables that the reserves are constantly replenished. It is good to have a well with a pump than a water tank. We have a saying that it is better to learn how to fish than to have a fish. Pakistan's problem is not so much lack of fish than not knowing how to fish (well).

 

[mb444]

That is true. But if the country is running well, reserves needed for a few months of imports should be OK. I would think for Pakistan, that would be $20 or 30 billion. But what is far more important is the economic engine should be capable of producing enough tradeables that the reserves are constantly replenished. It is good to have a well with a pump than a water tank. We have a saying that it is better to learn how to fish than to have a fish. Pakistan's problem is not so much lack of fish than not knowing how to fish (well).

BDs reserves are good for almost 4 months of import payment without even considering $6-7b worth of export and remittances. Our current account are in the positives at the moment.

As you say reserves should only be enough to grease the wheel and some more just incase.

I wont claim to know much about PK but from my basic understanding it has deep seated issues. How they have borrowed so much and where they have spent it and how they are going to pay for it is anyones guess.

 

[mb444]

Year ago Pakistan was near $30 Billion. More than your several times higher. Your several times higher will go poof in matter of months.

Come back and lecture us then...

BD trolls started bashing pakistan rather shed some light on 19bn$ and how its happened .

@ThunderCat and @Khan_21 look here hypocracy .as soon as you put your feet on their tails they start barking pakistan even pakiatan have nothing to do with thread.

You started this troll thread amongst others. Why bitch when BDs respond? Did you think you are special?

Keep out of BD issues if you do not want us to make you look at PK.

 

[epebble]

BDs reserves are good for almost 4 months of import payment without even considering $6-7b worth of export and remittances. Our current account are in the positives at the moment.

As you say reserves should only be enough to grease the wheel and some more just incase.

I wont claim to know much about PK but from my basic understanding it has deep seated issues. How they have borrowed so much and where they have spent it and how they are going to pay for it is anyones guess.

I think those 'deep seated issues' are mostly lack of prudent judgement in economic planning. They haven't had many good finance ministers or planning board or any such that makes long term decisions for investment. Hence, each government/minister/administration does whatever fancies them. Someone will decide we will build a fancy city, another will say how about some first-class roads. No one will think of railways or power grid because it is not sexy. Who the heck cares about 400kv transmission line going in the countryside or the choo-choo hauling goods?

 

[mb444]

they seems to obssesed with paksitan bashing i am just putting them back on auqat

Hows that going for you? .... from my position each one your argument is getting destroyed and you are getting slaps after slaps....

Go drown in your whisky..

 

[Imran Khan]

Hows that going for you? .... from my position each one your argument is getting destroyed and you are getting slaps after slaps....

Go drown in your whisky..

idiot no one can slap anyone on internet forum its show how you are frustrated .

Come back and lecture us then...



You started this troll thread amongst others. Why bitch when BDs respond? Did you think you are special?

Keep out of BD issues if you do not want us to make you look at PK.

its troll thread ? its a news published in the business stranded .i have posted with link .

 

[mb444]

I think those 'deep seated issues' are mostly lack of prudent judgement in economic planning. They haven't had many good finance ministers or planning board or any such that makes long term decisions for investment. Hence, each government/minister/administration does whatever fancies them. Someone will decide we will build a fancy city, another will say how about some first-class roads. No will with think of railways or power grid because it is not sexy. Who the heck cares about 400kv transmission line going in the countryside or the choo-choo hauling goods?

PK's 90%+ loan to GDP ratio does lend credence to your explanation.

One always assumed there must have been a plan, just badly implemented. But it could very well be they never even had a plan.

That is a very serious issue for a nuclear armed country of almost a quarter a billion. A destabilised PK is not good for anyone.

idiot no one can slap anyone on internet forum its show how you are frustrated .



its troll thread ? its a news published in the business stranded .i have posted with link .

Ok i am frustrated..sure....

As have I in response posted source material .... if my response is trolling so is your...basic logic..

As i said hit the whisky bottle that you are so fond off and keep boasting about....actually can you even afford it anymore???

 

[epebble]

PK's 90%+ loan to GDP ratio does lend credence to your explanation.

One always assumed there must have been a plan, just badly implemented. But it could very well be they never even had a plan.

That is a very serious issue for a nuclear armed country of almost a quarter a billion. A destabilised PK is not good for anyone.



As have I in response.... if my response is trolling so is your...basic logic..

The nuke/missiles are another dark comedy. Most countries won't allow Pakistan's airlines to come to the airspace, but missiles are well managed. Now, one would think getting airlines in order would be good since it saves foreign currency to transport all the travelers abroad on foreign airlines. But the airlines and pilots are treated like shadetree mechanics while the military gets pampered treatment.