Pakistan Exports increase to 25bn USD, while Remittance - 22bn USD

[Zee-shaun]

current CAD was artificially created by doing two things
1. keeping rupee overvalued and high state bank lending(put simply printing notes)
2. keeping interest rates low

this was done so in short term govt gets huge amount of money to spend to create an artificially strong short term growth but long term you cant sustain steriod use

unfortunately this has been done for last 30 years..

pakistan is like a body builder who lacks discipline end up using steroids and end up in hospital

I concur, Goon league pumped more than $22 billion to keep the PkR overvalued. Most of it came through foreign loans and bonds. It's an economic hitman's candy and a recipe for disaster for the recipent.

Govt must take a tough decision and let the PKR go into free fall. The inflation will certainly hit the common man and the economic growth with slow down for this year. But this is a bitter pill we must swallow because it will ertainly ease the CAD. Govt should subsidise atta, daal and chawal to ease the impact on the poor households and increae tax on luxury items. PKR will settle between 200-210 vs dollar and come to it real value.
IK should not do it now in his first year so he can yield better results to show in the following years.

I am curious about the IMF terms that will be announced.

 

[ziaulislam]

I concur, Goon league pumped more than $22 billion to keep the PkR overvalued. Most of it came through foreign loans and bonds. It's an economic hitman's candy and a recipe for disaster for the recipent.

Govt must take a tough decision and let the PKR go into free fall. The inflation will certainly hit the common man and the economic growth with slow down for this year. But this is a bitter pill we must swallow because it will ertainly ease the CAD. Govt should subsidise atta, daal and chawal to ease the impact on the poor households and increae tax on luxury items. PKR will settle between 200-210 vs dollar and come to it real value.
IK should not do it now in his first year so he can yield better results to show in the following years.

I am curious about the IMF terms that will be announced.

real effective rate is calculated by state bank, its in open domain(i.e even you can check it) right now its almost at 1.0 meaning rupee is at its real value, it was not from 2014-2018. however large deficit and large state bank lending means rupee will continue to fall for next 2-3 years..though i doubt it will go beyond 155..expected rupee devaluation will be around 5% per year from today for next 1-2 years and than the usual normal 2-3%/year(indian currency losing 2-3% per year)

 

[ziaulislam]

He’s on the ball...

Establishment has 2 choices now... either get shafted by the US or get down on its knees for China

And who forced the situation..all PMLN PPPP leadership should be jailed for treason ..but no we are talking about bringing them back soon

 

[Zee-shaun]

real effective rate is calculated by state bank, its in open domain(i.e even you can check it) right now its almost at 1.0 meaning rupee is at its real value, it was not from 2014-2018. however large deficit and large state bank lending means rupee will continue to fall for next 2-3 years..though i doubt it will go beyond 155..expected rupee devaluation will be around 5% per year from today for next 1-2 years and than the usual normal 2-3%/year(indian currency losing 2-3% per year)

I doubt PKR will stay under 155, it might reach 180 bij year end. There is positive reporting on remmittence and export growth and imports are reducing but our debt serving remains high so Forex will face distress for another two years before the PkR stabalises. It will settle around 200.

Exports to China will grow under the new agreement. Thats a good sign.

 

[ziaulislam]

I doubt PKR will stay under 155, it might reach 180 bij year end. There is positive reporting on remmittence and export growth and imports are reducing but our debt serving remains high so Forex will face distress for another two years before the PkR stabalises. It will settle around 200.

Exports to China will grow under the new agreement. Thats a good sign.

based upon what?
CAD has already dropped to manageable level
3% devalution/year will put the rupee at around 170 at end of PTI tenure

 

[Zee-shaun]

based upon what?
CAD has already dropped to manageable level
3% devalution/year will put the rupee at around 170 at end of PTI tenure

Debt serving is between $25-30 billion in next 2 years. How much of that will be covered by IMF? Unless friendly countries (KSA/UAE) provide relief, most of the Forex will be lost and CAD might increase putting more pressure on the rupee Sir.

 

[xyxmt]

You can call it export of services.. you provided your services to a foreign country, that country paid you in dollars, and you brought the dollars here and added to the country's current account.. It should be counted under exports..

Anyway, whether it is counted as export or not, the transaction increased the foreign currency current account of Pakistan...

My uncle participates in short exhibitions abroad.. He sends goods before leaving for the exhibition, reaches the destination and receives goods from the foreign port, sets up the stall in the exhibition, sells goods, gets money, some through credit cards, some cash.. then he goes to a money exchange, send the cash to Pakistan, but keeps some foreign currency with him (minimal)... comes to Pakistan, exchanges the foreign currency in the local market.. that's ideally export..

His and your difference is that, you sold your services in exchange of money and brought the cash to Pakistan and added in Pakistan's foreign account..

but I am a visitor, point I am trying to make here is lots and lots of Pakistanis visit Pakistan every years and to my experience spend $1000 in 2 weeks per family, families go there for wedding shopping and spend quite a bit and its a very big business. I think expat visitors easily spend amount equal to remitances.

It's not about how you converted your currency, It's how you brought it to Pakistan. If transferred by bank (or money transfer) then it's counted as remittance, otherwise in exports (as service) - FDI is investment in business. But if you brought in your pocket than it's not counted anywhere no matter where you changed it, BTW do banks sell/purchase forex from Individuals in Pakistan? I wasn't aware of it.

yes every foreign exchange branch does

 

[AZADPAKISTAN2009]

when I went to Pakistan is 2018 and spent USD 3000 (converted to Rs. in bank), does that count as remittance or export.

Export = When Pakistan sells goods (Textile , Wheat , Sugar , Fruit , Vegetables and gets money in return)

When you Order Pakistani Rupee , from Overseas to take to Pakistan then sends Dollar Pakistan's Way

Or when you send cash from Overseas to Pakistan by Money Transfer

 

[maithil]

Very scary analysis by Najam Sethi

That's a very troubling analysis. Worse part is that chances of this happening is very high.

 

[Abdussamad]

BTW do banks sell/purchase forex from Individuals in Pakistan? I wasn't aware of it.

Not banks but foreign exchange companies which are separate businesses. Banks only provide forex to importers.

BTW how come you don't know this when, according to your profile, you live in Pakistan?

yeah but I converted to rupee in a bank so technically its remittance, or FDI??

Technically those are proceeds from tourism exports but IDK whether it shows up as that or as remittances in official figures. Often there's incorrect classification of earnings in Pakistan. For example most IT exports by freelancers are classified as remittances by banks. It's a problem in the IT sector because it means overall IT exports are lower than they really are and so the sector is not given the attention it deserves by policy makers.

(we also have the opposite problem where some companies don't do any IT work at all but get their earnings credited as such. for example Axact)

 

[Sugarcane]

yes every foreign exchange branch does

No, every foreign exchange doesn't do, that's for sure.

BTW how come you don't know this when, according to your profile, you live in Pakistan?

I know banks in Pakistan don't trade currency with individual, I thought maybe it's changed now as he said that he got it converted from bank.

 

[Goenitz]

we really need looted money in foreign bank accounts... govt should make that first priority... especially, money invested in Gulf countries...

 

[xyxmt]

No, every foreign exchange doesn't do, that's for sure.



I know banks in Pakistan don't trade currency with individual, I thought maybe it's changed now as he said that he got it converted from bank.

what is the purpose of Foreign Exchange branch and they dont deal in Forex


I always go to NIT branch in Shaheen complex which deals in Forex, previously i have done it from Habib bank Forex branch in MA jinnah, I call a bank and ask where is your nearest forex branch

 

[FOOLS_NIGHTMARE]

 

[AZ1]

Yeh bakwas bahot sun chukay ham PTI or Asad Umar say.

Kuch din baad pir yahi jhootay log doosray figures deygay or log yeh sab bhool jayegay.

Pagal kar diya hai logo ko PTI nay.

In jhooto ki batein suno

https://www.geo.tv/latest/234184-pakistan-to-sign-6-8-billion-agreement-with-imf-asad-umar

https://www.pakistantoday.com.pk/2019/01/12/govt-to-present-second-mini-budget-on-jan-23-asad-umar/

We need imf, we don't need imf. Economy is crap, economy is good. We will not raise electricity prices, we will raise prices. We don't accept imf conditions, we hired imf to negotiate imf.


PTI ki leadership itni great ho gayi hai jhoot (Uturns) leitay leitay k yeh bhool gayi hai pechli raat kya kaha tha.

Munnay jo mil raha hai ganeemat jano nahi tou zardari ya nawaz ko wapus lao aur apni anay wali generation ko sufffer karao.