Pakistan central bank will no longer finance government deficit

[blueazure]

You are nothing but a PTI troll with an agenda to propagate the PTI narrative. Your entire response is laced with political bias. It has been a displeasure talking with you.

@jaibi per new forum rules I would like to flag this guy as being rude, advancing the agenda of a certain party, and misinterpreting others through a political lens. His very existence on the forum is irrelevant.

exactly

ive reported this dumb troll to MODS numerous times . most likely ,hes just a teenager ,( early 20s ) and simply spews nonsense one - liners on the lines of his social media handlers

you are correct = its a displeasure and foul experience just engaging with this PTI ZOMBIE

it seems our central bank has lost independence and control over monetary policy and has gone completely in hands of foreign powers

nope.

they havent lost control , they never do

they are just doing what they do( or what their master ,the rothschild BIS tells them) , aka , the manipulation of economy via monetary controls


why raise interest rates to 13 percent and crash the economy ?

why sell T bills to dubious hedge funds overseas ?

why print money sans collateral ?

--------------------------------------

this is not going to end well

 

[Norwegian]

exactly

ive reported this dumb troll to MODS numerous times . most likely ,hes just a teenager ,( early 20s ) and simply spews nonsense one - liners on the lines of his social media handlers

you are correct = its a displeasure and foul experience just engaging with this PTI ZOMBIE

Pmln trolls like you will be dealt accordingly.

why raise interest rates to 13 percent and crash the economy ?

To curb the impending hyper inflation thanks to your favorite pmln govts past 5 years

why sell T bills to dubious hedge funds overseas ?

To fill the foreign reserves that got lost defending the USD at 104 RS by your very smart finance minister Ishaq Dollar

this is not going to end well

So why were you sleeping in previous govt when all their economic policies nearly bankrupted Pakistan? Why are you still defending them, patwari?

 

[deathfromabove]

Hi, does this mean that central will no longer accept govt borrowing requests or does this mean that central bank profits will be retained?

 

[blueazure]

Hi, does this mean that central will no longer accept govt borrowing requests or does this mean that central bank profits will be retained?

it simply means central bank will no longer ' print ' money and give to govt

 

[NewStudent]

It would be better if we try to understand Pakistan's debt structure.

1. Domestically, Pakistan gets loans from SBP, commercial banks and the general public (National Savings Schemes). SBP is agreeably one of the main sources, but getting loans from this source directly leads to more currency in the economy and hance higher inflation. Therefore, closing this source is a good step.

2. As mentioned earlier, there are still other sources (domestically) that lend money to the government, so there is no urgency as to how salaries and pensions would be financed. Although, getting loans from these sources has its own disadvantages.

3. The only viable source for government financing is direct taxation, where the government needs more focus.

 

[CriticalThought]

It would be better if we try to understand Pakistan's debt structure.

1. Domestically, Pakistan gets loans from SBP, commercial banks and the general public (National Savings Schemes). SBP is agreeably one of the main sources, but getting loans from this source directly leads to more currency in the economy and hance higher inflation. Therefore, closing this source is a good step.

2. As mentioned earlier, there are still other sources (domestically) that lend money to the government, so there is no urgency as to how salaries and pensions would be financed. Although, getting loans from these sources has its own disadvantages.

3. The only viable source for government financing is direct taxation, where the government needs more focus.

That's a good breakdown of the debt structure. There are no arguments or concerns here. The concern is the manner in which IMF has appointed the head of state bank and is now trying to wrest control of money supply away from the government. We have traitors sitting who are looking for any excuse to withhold funds from programs of national security. Put the two together and you get a dire situation.

If we had a politically strong and nationalistic government, a strong and patriotic head of State Bank, and these measures were taken, I would be lauding them along with others.

You seem young and very quintessential. As you grow older, you will learn to look at things with a heavy dose of suspicion. In ideal textbook explanations, Central Banks are independent entities facing no pressures from the government. Now consider the real world. LIBOR is a very important rate that determines a lot in international markets. For decades people thought it was set in a corruption free and independent manner. Until a few years ago they discovered impropriety in its workings. The same is true everywhere. Corruption is rampant around the world an everyone knows it. In day to day affairs, we keep this at the back of our minds but give people the benefit of doubt. But what Imran Khan and his cronies have done, I refuse to give them any benefit of doubt.

 

[A.A. Khan]

It might look very rosy for someone outside but it actually is very dangerous step if one understands how financing operates in Pakistani markets.

This IMF hitman Reza Baqir is only going to destroy Pakistani economy not improve it. The Pakistani businesses are crying to cut interest rates to spur some improvements. This imf dalaal is not even leaving Pakistan with any relief to gain from the huge reduction in oil prices around the world. He is increasing dependence on foreign hot money which if removed now will push devaluation of rupee to 200 as well as increase our external debt twofold due to weak currency.

 

[NewStudent]

That's a good breakdown of the debt structure. There are no arguments or concerns here. The concern is the manner in which IMF has appointed the head of state bank and is now trying to wrest control of money supply away from the government. We have traitors sitting who are looking for any excuse to withhold funds from programs of national security. Put the two together and you get a dire situation.

If we had a politically strong and nationalistic government, a strong and patriotic head of State Bank, and these measures were taken, I would be lauding them along with others.

You seem young and very quintessential. As you grow older, you will learn to look at things with a heavy dose of suspicion. In ideal textbook explanations, Central Banks are independent entities facing no pressures from the government. Now consider the real world. LIBOR is a very important rate that determines a lot in international markets. For decades people thought it was set in a corruption free and independent manner. Until a few years ago they discovered impropriety in its workings. The same is true everywhere. Corruption is rampant around the world an everyone knows it. In day to day affairs, we keep this at the back of our minds but give people the benefit of doubt. But what Imran Khan and his cronies have done, I refuse to give them any benefit of doubt.

Well, thanks for your explanation. My reply was just for the information of some posters, who might have little idea of debt financing in Pakistan. IMF always has a "One size fits all" formula for whatever country they help finance. I do agree with you that their formula will not work for all including Pakistan. As @A.A. Khan rightly pointed out the higher interest rate is devastating for our economy. I have written briefly on this topic in the economy section, as how it will play havoc with Pakistan's economy.