"Export of August 2021 fall short and only USD 2.257 billion"Abdul Razak

[Desprado]

If you have reserves you cannot default. The only way to default is to have an extremely high short term debt that is about to mature and you don't have the money to finance it, and no one is willing to give you loans either. We aren't there yet.

1) 4.5 billion dollar are safe deposit of Chinese in our 20 billion dollar SBP Reserve. Safe deposit means that it is unusable and cannot used even 1 dollar.

2) 3 billion dollar are of UAE and KSA combine safe deposit.

3) 5 billion dollar swap exchange, which has to be paid maximum in 6 months and cost of this is 5% of it's every 3 months

4) IMF liability is 7.8 billion dollar. Only it will converted into Positive reserve if we complete the whole program ,otherwise it will be taken out within 1 year according to IMF act 2012. That is why PPP never felt after shocks of IMF program ending prematurely other wise it would have been in a same situation.




I am telling you we will get soft default in this late month. Just announce default so that we could avoid paying this all and we will have chapter 11 rights and 5 year grantee. The after shocks will only be for 6 otherwise it will be late September after shocks will be much heavy.

 

[Enigma SIG]

PTI is only beating 2011 numbers of PPP still it is 1 million dollar above only with the devaluation of 100%

chawlan na mareya kar.

 

[Maula Jatt]

Read here to understand CAD and all of its components

Financial terrorism committed by the Govt-Military duos

First of all, I am the one who is leading this discussion. Don't strut around like you are an expert. Second, the fact of the matter is that your leader has sought to subvert the discussion by constructing an argument around CAD. So let me give you some education. There is a concept more...

defence.pk

They are all netted to compute CAD. You can use accounting jugglery to show a farcical improvement in CAD. But yes, increasing exports and decreasing imports is the sustainable method of bringing down CAD.

Yeah but isn't this exactly what all our state/gov is focused on rn? - everyone is repeating it like a madman

our exports are also growing (this time it didn't grow to our expectations but relatively speaking still growing) (but with it imports will grow too)

I just see CAD crisis as transition from importing economy to exporting one

but issue is can we handle this crisis of CAD?, this is debatable and a tricky question with no clear answer

 

[CriticalThought]

1) 4.5 billion dollar are safe deposit of Chinese in our 20 billion dollar SBP Reserve. Safe deposit means that it is unusable and cannot used even 1 dollar.

2) 3 billion dollar are of UAE and KSA combine safe deposit.

3) 5 billion dollar swap exchange, which has to be paid maximum in 6 months and cost of this is 5% of it's every 3 months

4) IMF liability is 7.8 billion dollar. Only it will converted into Positive reserve if we complete the whole program ,otherwise it will be taken out within 1 year according to IMF act 2012. That is why PPP never felt after shocks of IMF program ending prematurely other wise it would have been in a same situation.




I am telling you we will get soft default in this late month. Just announce default so that we could avoid paying this all and we will have chapter 11 rights and 5 year grantee. The after shocks will only be for 6 otherwise it will be late September after shocks will be much heavy.

Even with the numbers above we have $10 billion to play with. I agree if we cannot find avenues to increase dollar inflows we will be in trouble, but I didn't think it would be so soon. Still, what you are saying is very disconcerting.

Yeah but isn't this exactly what all our state/gov is focused on rn? - everyone is repeating it like a madman

our exports are also growing (this time it didn't grow to our expectations but relatively speaking still growing) (but with it imports will grow too)

I just see CAD crisis as transition from importing economy to exporting one

but issue is can we handle this crisis of CAD?, this is debatable and a tricky question

CAD is just one of your problems. And it is being used to deflect away from the real problem: debt in dollars which is mounting and at the same time enemies of Pakistan are doing everything to cut off dollar inflows and Imran Khan under the protection of Bajwa is complicit in this heinous attempt to destroy Pakistan.

 

[Pakistansdefender]

Now you can laugh as much you want i prove and i was that excessive devaluation does not help export or stops imports

https://twitter.com/x/status/1433002729023188998

Now you can laugh as much you want i prove and i was that excessive devaluation does not help export or stops imports

Remittance will be reduced and CAD number will be beyond July 2021 numbers even after 3% devaluation in August.

I wish we could have defaulted in mid 2018 so at least we could have avoided PTI finance team.

How cleverly you have changed the headline. It's like glass is half full or half empty.they have increased from 1. 5 billion dollars previous year to 2.25 billion dollars. A one billion dollar increase in an year.
Jahalat has its limits but ofcourse you are that media cell guy specially hired to propagate propaganda so I can understand

 

[Desprado]

How cleverly you have changed the headline. It's like glass is half full or half empty.they have increased from 1. 5 billion dollars previous year to 2.25 billion dollars. A one billion dollar increase in an year.
Jahalat has its limits but ofcourse you are that media cell guy specially hired to propagate propaganda so I can understand

2.5 billion dollar import increased as well. Where there you get your thoughts?

 

[ziaulislam]

chawlan na mareya kar.

View attachment 774769

See you can clearly see the graph showing exports are decreasing ..in urdu you look from right to left
@Desprado
Sir u r right
See how the graph shows exports are going down

 

[Patriot forever]

Yeah but isn't this exactly what all our state/gov is focused on rn? - everyone is repeating it like a madman

our exports are also growing (this time it didn't grow to our expectations but relatively speaking still growing) (but with it imports will grow too)

I just see CAD crisis as transition from importing economy to exporting one

but issue is can we handle this crisis of CAD?, this is debatable and a tricky question with no clear answer

CAD should be in a manageable limit, which a free float market based currency can handle, with no to limited impact on our reserves. That's why you see the currency depreciation which is adjusting as it will bear the brunt of the targeted 2-3% of GDP Current Account Deficit, it acts as first line like a rubber band, and limiting the impact on reserves.

The first 2 months ( August data is not out yet but most likely it will be in that range) we are within the limit. Yes we can handle it, that too with very limited impact on reserves.

Asfar as the exports are concerned. We have set a very optimistic target 27-29b for ourselves. $2.257 is a very decent number. In just 2 months our exports are at $4.65b.

Anything above 27.5b for the year is a very good start. Not to mention these are exports in goods. IT sector in services exports is also doing remarkably good. So are remittances.

2.5 billion dollar import increased as well. Where there you get your thoughts?

Can you share the import numbers?
I don't think its out yet, or I may have missed.

Where did you get the figure from.

 

[Desprado]

CAD should be in a manageable limit, which a free float market based currency can handle, with no to limited impact on our reserves. That's why you see the currency depreciation which is adjusting as it will bear the brunt of the targeted 2-3% of GDP Current Account Deficit, it acts as first line like a rubber band, and limiting the impact on reserves.

The first 2 months ( August data is not out yet but most likely it will be in that range) we are within the limit. Yes we can handle it, that too with very limited impact on reserves.

Asfar as the exports are concerned. We have set a very optimistic target 27-29b for ourselves. $2.257 is a very decent number. In just 2 months our exports are at $4.65b.

Anything above 27.5b for the year is a very good start. Not to mention these are exports in goods. IT sector in services exports is also doing remarkably good. So are remittances.


Can you share the import numbers?
I don't think its out yet, or I may have missed.

Where did you get the figure from.

Imports are higher than July because sir FBR collected 66 billion rupee on custom duty in July and August 74 billion on August. It is a common sense even after Petrol is cheap than July. So market base currency is bringing inflation and not reducing CAD ,which people provided excuse for.Right now our reserve means nothing and their impact none even if it is 100 billion dollar to -0. If have reserve or no reserve is same.

 

[Patriot forever]

Imports are higher than July because sir FBR collected 66 billion rupee on custom duty in July and August 74 billion on August. It is a common sense even after Petrol is cheap than July. So market base currency is bringing inflation and not reducing CAD ,which people provided excuse for. Right zero reserve are equal our reserve. If have reserve or no reserve is same.

The overall picture will be very similar to July. CAD will be in line with the target.


"The American ratings agency estimated Pakistan’s requirement for foreign financing would stand fully covered for the next 12 months with inflows coming from multilateral and bilateral credit partners. More importantly, the amount of ‘usable’ foreign currency reserves rose to $14 billion at present compared to $2.4 billion two years ago in 2019".

S&P keeps outlook stable for Pakistan | The Express Tribune

Ratings agency sees country’s economy progressing, implementation of economic reforms

tribune.com.pk

That is just the usable recerves with SBP, roughly around $7b extra to this amount.

 

[Type59]

Remittance should be factored in.

 

[Patriot forever]

Our CAD rose because of growth right?

Yes that's right with some caveats, you have to factor in the global commodity index as well and the nature of imports.

Our CAD in July was roughly around $770m ( no where near the $2b/month in 2018), had the global inflation not kicked in it would have been lower by $300-400m. Also TERT (pure machinery oriented import) disbursements etc etc.

"The expected quantum of disbursements under TERF was estimated at Rs273 billion in FY2022, while actual disbursements in FY2021 stood at Rs163 billion, the SBP document showed" .

SBP sees TERF loans surging 67 percent in FY22

KARACHI: State Bank of Pakistan expects loan disbursements under Temporary Economic Refinance Facility increasing 67 percent this fiscal year, paving way for new industrial investments and...

www.thenews.com.pk

The problem with out economy is whenever we push the peddle to excelerate growth, imports ( essential imports for domestic industries /raw materials) kick in also. With the flawed policy of artificially manipulated currency during previous term we basically became an import oriented economy and actively suffocated out export oriented local industries. Which led to spirriling uncontrolled growth in imports with no increase in exports, thus the resulting BoP crisis with unsustainable CAD which reached $20b ( couple it with fixed overvalued currency it was funded by reserves/borrowing) thus the IMF bailout package.

See how Bangladesh exports grew along with their imports without any break except the drop due to corona ( reciprocally in Pakistan as well). This is why the last 5 years were the most destructive and now until we correct the resulting imbalance it will be tough days. Until we do attain a balance ( not just growth in exports, remittances, It services will help as well to bridge the gap which are also growing substantially) our currency will fluctuate, we have to tolerate IMF harsh conditions etc etc.

Once we are done with the transition phase, we will no longer need IMF, our currency will get more stable and we will be like the rest of the world with natural currency, all variables such as growth in imports exports remittances fdi growing proportionately balancing each other out ' sustainable growth'.

 

[Desprado]

Yes that's right with some caveats, you have to factor in the global commodity index as well and the nature of imports.

View attachment 774824

Our CAD in July was roughly around $770m ( no where near the $2b/month in 2018), had the global inflation not kicked in it would have been lower by $300-400m. Also TERT (pure machinery oriented import) disbursements etc etc.

View attachment 774823

The problem with out economy is whenever we push the peddle to excelerate growth, imports ( essential imports for domestic industries /raw materials) kick in also. With the flawed policy of artificially manipulated currency during previous term we basically became an import oriented economy and actively suffocated out export oriented local industries. Which led to spirriling uncontrolled growth in imports with no increase in exports, thus the resulting BoP crisis with unsustainable CAD which reached $20b ( couple it with fixed overvalued currency it was funded by reserves/borrowing) thus the IMF bailout package.

See how Bangladesh exports grew along with their imports without any break except the drop due to corona ( reciprocally in Pakistan as well). This is why the last 5 years were the most destructive and now until we correct the resulting imbalance it will be tough days. Until we do attain a balance ( not just growth in exports, remittances, It services will help as well to bridge the gap which are also growing substantially) our currency will fluctuate, we have to tolerate IMF harsh conditions etc etc.

Shukat Tarin has lead Pakistan to Default in 2008. He abandoned the IMF program in 2008 and he was fired in 2010 because IMF put more hard conditions rather than softening it.


It was Hafez Sheik who came negotiated with IMF that they do not take credit liabilities and he was successful in 2010.


Mark my word this guy will lead us to default end of this month and he doing same thing he did in 2008 with IMF. He has very bad history with IMF and they do not like this man. He will go IMF on Qatar Airways in October 13th and will have direct meeting with Gerry Rice and Gerry Rice will put his words to IMF boss. However, I know he will come with chit of things to do at mid of October and i swear from my heart we cannot take it and our Industry will confirm collapse due to those condition and it will better to announce default.

It is more better to announce default now so that we can rid of this FM and SBP governor.

 

[SQ8]

A lot of the PTI financial pain(apart from the mess done by the swine ruling prior to them) came from Asad Umar’s indecision and incompetence during the critical first 6 months.
The guru of Engro was hapless when faced with a national economy versus a single vertical corporation hence the need for an actual Subject Matter Expert.
There will be no miracles for Pakistan and even great policies will take 15 years to correct the damages done by the families and their worshippers here.

That being said, much like their predecessors the Bani Israel - even if there were miracles through some leader, Pakistanis immediately would want staple food instead of miracles and eventually a golden cow they can worship instead of one god.

 

[CriticalThought]

A lot of the PTI financial pain(apart from the mess done by the swine ruling prior to them) came from Asad Umar’s indecision and incompetence during the critical first 6 months.
The guru of Engro was hapless when faced with a national economy versus a single vertical corporation hence the need for an actual Subject Matter Expert.
There will be no miracles for Pakistan and even great policies will take 15 years to correct the damages done by the families and their worshippers here.

That being said, much like their predecessors the Bani Israel - even if there were miracles through some leader, Pakistanis immediately would want staple food instead of miracles and eventually a golden cow they can worship instead of one god.

These are generic, unsubstantiated opinions that are constructed to carefully avoid showing the present setup in a bad light.