For Pakistan: Disaster looms amid Drop in Rupee, Foreign Reserves, Remittances & High Inflation

[Asian.Century]

For Pakistan: Disaster looms amid Drop in Rupee, Foreign Reserves, Remittances & High Inflation

ISLAMABAD: The rudderless ship of economy is heading towards a disaster owing to the persistent drubbing of the rupee against the dollar in the wake of dwindling foreign exchange reserves and remittances, and possibility of a sharp rise in inflationary pressures.

Now such depreciation of the exchange rate will result in an increase in the POL prices and the same will apply in case of an increase in the fuel price adjustments (FPA) in the wake of furnace oil and imported RLNG becoming dearer in months ahead.

Headline inflation as well as core inflation is expected to further go up so the policy rate would also be increased under the IMF conditions.

A doomsday scenario is looming large with the possibility of heading towards steep “stagflation” on account of lowering GDP growth and an upsurge in CPI-based inflation in months ahead. Its ultimate victim would be the poor segments of the society because stagflation would push up poverty and unemployment.

Persistent decline in the exchange rate has crossed the mark of Rs300 against the US dollar in the interbank rate owing to the increased demand for dollars for clearance of imports, payment of dividends, and materializing structural benchmark condition of the IMF under $3 billion Standby Arrangement (SBA) for keeping the difference between interbank and open market not more than 1.25 percent.

The structural benchmark has now breached, as this difference stands at around 4.5 to 5 percent. But the State Bank of Pakistan (SBP) is not ready to say anything on record. The same is the situation related to the Ministry of Finance after assumption of power by the caretaker setup. When official spokesman for the SBP was inquired about continuous depreciation of exchange rate, the response was “no comments”.

At least, during the PDM-led regime, the then finance minister Ishaq Dar had always preferred to show his muscles against speculators but now no one seems in the mood to comment on the prevailing situation.

The Ministry of Finance has issued just one statement so far stating that the caretaker Minister for Finance Dr Shamshad Akhtar had arrived in the Q Block and assumed the charge.

The caretaker PM has selected Dr Shamshad Akhtar as Minister for Finance and Dr Waqar Masood as Advisor to PM on Finance with the status of minister of state but so far no division of work has been done to assign the responsibilities.

The collective responsibility is no more solution because it will not help determine the Key Performance Indicators (KPIs). So, there is a need to distribute the responsibilities in order to hold someone accountable at the end of the day.

In the prevailing difficult economic situation, the current account deficit witnessed rebounding and stood at $1 billion for July 2023 in the wake of reduced exports, remittances and increased imports.

The widening gap between interbank and open market rates will further reduce the possibility of luring remittances. On the internal front, the FBR’s revenue collection has also lagged behind than the required growth to materialize the annual target of Rs9.4 trillion.

Disaster looms amid drop in rupee, reserves, remittances

ISLAMABAD: The rudderless ship of economy is heading towards a disaster owing to the persistent drubbing of the rupee against the dollar in the wake of dwindling foreign exchange reserves and...

www.thenews.com.pk

 

[ProudThamizhan]

Crush Pakistan Expand China —-> CPEC

THERE is no solution from this decline for Pakistan until it stops the disastrous terms of CPEC. U r now paying China in 3 ways : loan interest, project fees and guaranteed equity returns.

 

[Rollno21]

Crush Pakistan Expand China —-> CPEC

THERE is no solution from this decline for Pakistan until it stops the disastrous terms of CPEC. U r now paying China in 3 ways : loan interest, project fees and guaranteed equity returns.

CPEC as a project was good, but the execution and the terms of the contract is what the problem is.

 

[AgNoStiC MuSliM]

Crush Pakistan Expand China —-> CPEC

THERE is no solution from this decline for Pakistan until it stops the disastrous terms of CPEC. U r now paying China in 3 ways : loan interest, project fees and guaranteed equity returns.

CPEC is not the issue, the political instability owing to a fascist crackdown by the Army Junta remains a major factor.

 

[ProudThamizhan]

CPEC as a project was good, but the execution and the terms of the contract is what the problem is.

When a lender forces upon a borrower a condition that the terms of a loan shall not ever be published, there are only two alternate possibilities:

1. The terms are so good that if exposed all other ‘customers’ will clamour for it. In case if banks and commercial lenders this would be a problem but in case of China, being a sovereign under a single party single tyrant system , not an issue . They can simply say no without consequences ; so then the only alternative reason is

2. The terms are so terrible that CCP does not want its usury exposed . Pakistan unfortunately had and has no choice and so accepts the terms .

This is what has happened. That is why the longer Pakistan suffers the CPEC yoke, the poorer it becomes

 

[OIO]

When a lender forces upon a borrower a condition that the terms of a loan shall not ever be published, there are only two alternate possibilities:

1. The terms are so good that if exposed all other ‘customers’ will clamour for it. In case if banks and commercial lenders this would be a problem but in case of China, being a sovereign under a single party single tyrant system , not an issue . They can simply say no without consequences ; so then the only alternative reason is

2. The terms are so terrible that CCP does not want its usury exposed . Pakistan unfortunately had and has no choice and so accepts the terms .

This is what has happened. That is why the longer Pakistan suffers the CPEC yoke, the poorer it becomes

The success of CPEC lies in the development of special economic zones, but it encountered the epidemic.

 

[AgNoStiC MuSliM]

That is why the longer Pakistan suffers the CPEC yoke, the poorer it becomes

Can you provide facts and figures from credible sources that support your claim (about horrendous Chinese loan terms)?

Additionally, lets assume CPEC loan repayments are aligned with comparable international terms considered ‘fair’, HOW exactly would that offset Pakistans myriad other structural issues, not least of which is the political instability and lack of policy continuity due to the Fauj repeatedly, almost since Pakistan’s inception, taking fascist and unconstitutional actions?

 

[Clutch]

Can you provide facts and figures from credible sources that support your claim (about horrendous Chinese loan terms)?

Additionally, lets assume CPEC loan repayments are aligned with comparable international terms considered ‘fair’, HOW exactly would that offset Pakistans myriad other structural issues, not least of which is the political instability and lack of policy continuity due to the Fauj repeatedly, almost since Pakistan’s inception, taking fascist and unconstitutional actions?

Why are you bothering??


This is what Pakistan is symbolically today:

 

[ProudThamizhan]

The success of CPEC lies in the development of special economic zones, but it encountered the epidemic.

epidemic? you mean the CCP wuhan virus based global massacre

Can you provide facts and figures from credible sources that support your claim (about horrendous Chinese loan terms)?

Additionally, lets assume CPEC loan repayments are aligned with comparable international terms considered ‘fair’, HOW exactly would that offset Pakistans myriad other structural issues, not least of which is the political instability and lack of policy continuity due to the Fauj repeatedly, almost since Pakistan’s inception, taking fascist and unconstitutional actions?

nobody can and that is the point. Full terms of the CPEC programs have not been disclosed. You tell me why

 

[Rollno21]

When a lender forces upon a borrower a condition that the terms of a loan shall not ever be published, there are only two alternate possibilities:

1. The terms are so good that if exposed all other ‘customers’ will clamour for it. In case if banks and commercial lenders this would be a problem but in case of China, being a sovereign under a single party single tyrant system , not an issue . They can simply say no without consequences ; so then the only alternative reason is

2. The terms are so terrible that CCP does not want its usury exposed . Pakistan unfortunately had and has no choice and so accepts the terms .

This is what has happened. That is why the longer Pakistan suffers the CPEC yoke, the poorer it becomes

What I ment was , let me make it simple for understanding.

Let's say my neighbour's need a path through my land (China wanted an alternate path) ,the neighbour comes to me and says I want a path through your land.if he tell me that he will spend the money needed and I have to pay later,I would tell him to go F**k himself. But that was not what happened in cpec case. Chinese were given guarantees on assured returns(Pakistan could have negotiated cost sharing).

After the project started , china awarded the contracts to Chinese companies , material needed purchased from chinese companies ,Chinese labour worked on it mostly on important roles.what ever the billions of dollars paksitan talks about did not really enter pakistan economy(otherwise Pakistan would not be struggling for dollars every year, Chinese paid in their local currency and Pakistan has to pay back in dollars).

 

[OIO]

epidemic? you mean the CCP wuhan virus based global massacre

Maybe you're an idiot or maybe you're deliberately slandering.

The new virus was only first responded to in Wuhan, has been spreading for a long time in other parts of the world.

 

[prothought]

The free fall of Pak rupee is not due to the imbalance in exports and imports. It's because of mafias. I was in Lahore during this summer. One day I withdrew a few thousand dollars from my roshan digital account. The bank manager asked me if I would like to exchange these dollars with Pak rupees. I said yes and that's why I was going to Western Union. He said call me from there and whatever rate you get from there I'll get you a better rate. So I called him and told him that Western Union offered me an exchange rate of Rs. 288.70 per US dollar. After five to ten minutes he called me back and offered me Rs. 296 per dollar. I am sure that he got that offer actually from some mafia person and of course he would get his commission too. It's not difficult for agencies to trace these black sheep out and prosecute them. But I don't understand why there is no crack down on these mafias.

 

[ProudThamizhan]

Maybe you're an idiot or maybe you're deliberately slandering.

The new virus was only first responded to in Wuhan, has been spreading for a long time in other parts of the world.

unfortunately for you and other CCPMice, neither.

 

[OIO]

unfortunately for you and other CCPMice, neither.

You are the maggot in the cesspit.

 

[ProudThamizhan]

You are the maggot in the cesspit.

No no, that'd be your buddy and colleague etylo.
you seem very confused today, what happened? too much coprophilia got to you too?