"Pakistan Rupee needs a breather without spending dollars" AAH Soomro

[Desprado]

"Pakistan Rupee needs a breather without spending dollars" AAH Soomro

Pakistan Rupee
In 3 months PKR is devalued more 15.5 rupee

US Dollar (USD) Exchange Rates in Pakistan Rupee
US Dollar (USD) exchange rates with Pakistan Rupee (PKR). US Dollar difference trend, currency charts and rates in major currencies like Australian Dollar, Canadian Dollar, Euro and UK Pound Sterling.
www.forex.pk


Now Look At Argentina 3 months only 3.8% devaluation (FDI has started to come in ,which is helping to stabilized it.)

https://twitter.com/x/status/1433478186701103110

"Pakistan Rupee needs a breather without spending dollars" AAH Soomro

Pakistan Rupee
In 3 months PKR is devalued more 15.5 rupee
US Dollar (USD) Exchange Rates in Pakistan Rupee
US Dollar (USD) exchange rates with Pakistan Rupee (PKR). US Dollar difference trend, currency charts and rates in major currencies like Australian Dollar, Canadian Dollar, Euro and UK Pound Sterling.
www.forex.pk


Now Look At Argentina 3 months only 3.8% devaluation (FDI has started to come in ,which is helping to stabilized it.)



Bangladesh Taka Rock solid
US Dollar (USD) Exchange Rates in Bangladesh Taka
US Dollar (USD) exchange rates with Bangladesh Taka (BDT). US Dollar difference trend, currency charts and rates in major currencies like Australian Dollar, Canadian Dollar, Euro and UK Pound Sterling.
www.forex.pk


Indian Currency our FM highlighted it also devalued has now Appreciated 2%
US Dollar (USD) Exchange Rates in Indian Rupee
US Dollar (USD) exchange rates with Indian Rupee (INR). US Dollar difference trend, currency charts and rates in major currencies like Australian Dollar, Canadian Dollar, Euro and UK Pound Sterling.
www.forex.pk

Srilanka Currency Rock Solid with 2.5 billion dollar reserve.

US Dollar (USD) Exchange Rates in Sri Lanka Rupees
US Dollar (USD) exchange rates with Sri Lanka Rupees (LKR). US Dollar difference trend, currency charts and rates in major currencies like Australian Dollar, Canadian Dollar, Euro and UK Pound Sterling.
www.forex.pk



My point is that it cannot go like this at one point we will start using dollar again to save PKR because it is confirm even by people said wait and see Policy that devaluation or Flexible exchange rate reduces CAD. No it does and never will. It is hard reforms and painful steps that does the trick. Automation does not do the trick like all the people were hopping. Even at late September PKR can to highest ,which is 170 against dollar and than the Panic starts and stock exchange starts to sell go bear and people starts to buy dollar aggressively because market is not moving is both ways and the people will go for most predictable outcome. So it means we will lose value of PKR by just sitting and hoping market is adjusting it self. You have seen lately that our FDI has shrink to 90 million dollar only in July is due to market is moving only way, which is down way. That is why investor are less coming and most investor are taking their money in outflow ,which also causing the panic.

At one point we will be start using dollars because we did not get exports results we wanted and the reduction we wanted in imports by devaluation and the food we are importing will be more expensive than Mafia is locally selling Pakistan ,therefore, both purpose of controlling inflation will be null and void. And we start using dollar the real crisis will start because you will need to support 1.5 billion dollar CAD monthly will not be joke and you do not support it than PKR can even go 190 by the end of this FY because the currency is not taking burden of CAD.

End Solution IMF but we are at weak line now and we will not have the upper hand that we thought we would have by end of July and things changed in Just one month. Mind it that Fund program never allows you to do CAD because it is a luxury and you are borrowing and they are lenders. Hope and Pray we learned today that strict measure and harsh reforms makes import less and export more but not the market base exchange rate as it only means of exchange it only supports idea not makes ideas.


The life line of devaluation is exhausted and now it will hurt the FDI, Export and it will increase more imports. So now PTI is in Catch 22 phase thanks to Shaukat Tarin.

 

[Norwegian]

"Pakistan Rupee needs a breather without spending dollars" AAH Soomro

You can't stabilize the PKR without spending USD from reserves

My point is that it cannot go like this at one point we will start using dollar again to save PKR

No we won't

 

[ACE OF HEARTS]

Trade with CHINA should only be done in RMB.
Since import from China is the highest import we have, the trading in RMB will save billions of USD from being spent on imports.

Relieving the pressure on USD

 

[Darth Vader]

Biggest issue is the exports.
Country with 200Mil people
Has nothing to actually offer that itself is shameful.
Until Pakistan sorts its import , export issue not much will change.

Punjab, Sindh with proper infrastructure can not only become reliable souce of food for Pakistan whole region including diary.

Everyone says Balochistan like Afghanistan is filled with resources what good are these when People itself cant use it to build its own economy.

NWFP can offer its own natural resources when.
When People will actually change

 

[Patriot forever]

"Pakistan Rupee needs a breather without spending dollars" AAH Soomro

Pakistan Rupee
In 3 months PKR is devalued more 15.5 rupee

US Dollar (USD) Exchange Rates in Pakistan Rupee
US Dollar (USD) exchange rates with Pakistan Rupee (PKR). US Dollar difference trend, currency charts and rates in major currencies like Australian Dollar, Canadian Dollar, Euro and UK Pound Sterling.
www.forex.pk


Now Look At Argentina 3 months only 3.8% devaluation (FDI has started to come in ,which is helping to stabilized it.)

https://twitter.com/x/status/1433478186701103110

"Pakistan Rupee needs a breather without spending dollars" AAH Soomro

Pakistan Rupee
In 3 months PKR is devalued more 15.5 rupee
US Dollar (USD) Exchange Rates in Pakistan Rupee
US Dollar (USD) exchange rates with Pakistan Rupee (PKR). US Dollar difference trend, currency charts and rates in major currencies like Australian Dollar, Canadian Dollar, Euro and UK Pound Sterling.
www.forex.pk


Now Look At Argentina 3 months only 3.8% devaluation (FDI has started to come in ,which is helping to stabilized it.)



Bangladesh Taka Rock solid
US Dollar (USD) Exchange Rates in Bangladesh Taka
US Dollar (USD) exchange rates with Bangladesh Taka (BDT). US Dollar difference trend, currency charts and rates in major currencies like Australian Dollar, Canadian Dollar, Euro and UK Pound Sterling.
www.forex.pk


Indian Currency our FM highlighted it also devalued has now Appreciated 2%
US Dollar (USD) Exchange Rates in Indian Rupee
US Dollar (USD) exchange rates with Indian Rupee (INR). US Dollar difference trend, currency charts and rates in major currencies like Australian Dollar, Canadian Dollar, Euro and UK Pound Sterling.
www.forex.pk

Srilanka Currency Rock Solid with 2.5 billion dollar reserve.

US Dollar (USD) Exchange Rates in Sri Lanka Rupees
US Dollar (USD) exchange rates with Sri Lanka Rupees (LKR). US Dollar difference trend, currency charts and rates in major currencies like Australian Dollar, Canadian Dollar, Euro and UK Pound Sterling.
www.forex.pk



My point is that it cannot go like this at one point we will start using dollar again to save PKR because it is confirm even by people said wait and see Policy that devaluation or Flexible exchange rate reduces CAD. No it does and never will. It is hard reforms and painful steps that does the trick. Automation does not do the trick like all the people were hopping. Even at late September PKR can to highest ,which is 170 against dollar and than the Panic starts and stock exchange starts to sell go bear and people starts to buy dollar aggressively because market is not moving is both ways and the people will go for most predictable outcome. So it means we will lose value of PKR by just sitting and hoping market is adjusting it self. You have seen lately that our FDI has shrink to 90 million dollar only in July is due to market is moving only way, which is down way. That is why investor are less coming and most investor are taking their money in outflow ,which also causing the panic.

At one point we will be start using dollars because we did not get exports results we wanted and the reduction we wanted in imports by devaluation and the food we are importing will be more expensive than Mafia is locally selling Pakistan ,therefore, both purpose of controlling inflation will be null and void. And we start using dollar the real crisis will start because you will need to support 1.5 billion dollar CAD monthly will not be joke and you do not support it than PKR can even go 190 by the end of this FY because the currency is not taking burden of CAD.

End Solution IMF but we are at weak line now and we will not have the upper hand that we thought we would have by end of July and things changed in Just one month. Mind it that Fund program never allows you to do CAD because it is a luxury and you are borrowing and they are lenders. Hope and Pray we learned today that strict measure and harsh reforms makes import less and export more but not the market base exchange rate as it only means of exchange it only supports idea not makes ideas.


The life line of devaluation is exhausted and now it will hurt the FDI, Export and it will increase more imports. So now PTI is in Catch 22 phase thanks to Shaukat Tarin.

Finally bro you posted something sensible.

1) No the rupee won't be sustained through intervention at the expense of our reserves.

2) The rupee is deliberately let to depreciate to adjust it so that it can bear the brunt of expected 2-3% CAD, in order to shield our reserves.

3) The rupee will automatically regain once the international inflation cycle stabilises/ rolls back. I am expecting by the 2H of FY. You need to understand that most of the CAD is coming from essential commodities price increase which is ballooning our imports.

-Soybean oil ( used as cooking oil)
-Palm oil ( desi ghee manufacturing)
-Coal ( Crossed $145 that is 80% increase since Jan 2021)
-Petroleum products ( Crude at the highest since 2015 I think) With the demand we are having our import bill was close to $1b in July and $1.3b in June I think on petroleum products.
-Scrap and iron/steel have gone up significantly.
-Lentils Tea etc.

Machinery imports at close to $900m in July, well over a billion dollars in June.

In July textile specific imports were $400m.

There is not much we can pull back on. There were no wheat or sugar imports ( except I think $18m sugar import in July)

We are just paying more for everything. I went through the list for June and July, if you find anything we can reduce let me know too but I did not find anything where we can save even a few hundred million.

The thing that I think we both agree on is there is a limit to which currency will hold (CAD should come down to $500m- $800m) and the sooner this inflationary cycle ends the better, this will make the currency stable at the current rate. Till than if we can apply band aid that would help.

 

[The Accountant]

Three things are happening causing pressure on our import bill.

Shipping cost has increased by almost 600% in past 7 to 8 month hence your import bill is up by 10% temporarily due to shipping. It will start coming down from jan 2022 probably.

Second thing is due to supply side issue besides shipping cost commodity prices has sky rocketed and there is a sever shortage of materials resulting in jackup of prices. For example there is a sever shortage of chips by chip indistry hence increase in commodity prices world wide.

Third thing is the investment policy of government which they introduced through TERF. My own company has 1.2 billion of LCs in terms of plant machinery pending. This huge investment was done on back of lower interest cost support by givernment. Alot of companies like ours are expanding so right now pressure is on rupee for import of P&M but sibsequently it will reduce import when we start domestic manufacturing.

Last and not least steel mill is now being privatised. Steel industry is backbone of any country who wants to manufacture. If start manufacturing steel locally specially from locally available balochistan ore then it will change our direction of CAD to unimaginable levels

 

[Desprado]

Three things are happening causing pressure on our import bill.

Shipping cost has increased by almost 600% in past 7 to 8 month hence your import bill is up by 10% temporarily due to shipping. It will start coming down from jan 2022 probably.

Second thing is due to supply side issue besides shipping cost commodity prices has sky rocketed and there is a sever shortage of materials resulting in jackup of prices. For example there is a sever shortage of chips by chip indistry hence increase in commodity prices world wide.

Third thing is the investment policy of government which they introduced through TERF. My own company has 1.2 billion of LCs in terms of plant machinery pending. This huge investment was done on back of lower interest cost support by givernment. Alot of companies like ours are expanding so right now pressure is on rupee for import of P&M but sibsequently it will reduce import when we start domestic manufacturing.

Last and not least steel mill is now being privatised. Steel industry is backbone of any country who wants to manufacture. If start manufacturing steel locally specially from locally available balochistan ore then it will change our direction of CAD to unimaginable levels

you are talking about service that is yet to come, which will be 1 billion dollar so total import and service 7.3-75 billion dollar in Just one go in August , so trade deficit will be 1.6-2 billion dollar in just one month. So myth that Devaluation stops imports and increase and make export competitive of 3 years excuse is gone.

 

[Zibago]

You can't stabilize the PKR without spending USD from reserves

No we won't

And wasting dollars on currency manipulation only makes people happy for few months max

 

[Desprado]

And wasting dollars on currency manipulation only makes people happy for few months max

Yes but what is about to come will take another 5 years to recover what Shaukat Tarin has done. Just for September numbers and this August was just a trailer.

 

[HammerHead081]

This is long term planning from govt., it might look gloomy but they are doing the right things. Right now they must do anything to facilitate increase in exports, get FDI in country and somehow get Paksteels up. Thats all they can do. Can't do much about rupee value dropping if they don't use reserves.

 

[Imran Khan]

its good keep forex so we should not ask loans and aid

 

[Desprado]

its good keep forex so we should not ask loans and aid

Sir the debts they are taking to fill CAD is very short. These all taken from foreign commercial banks and their interest rate is high and lending is very short. Just in July we have taken 1.6 billion dollar debt to pay 600 million dollar for CAD and 1 billion to pay our debts. August number will much higher than this due to that last month Alone CAD will be above 1.5 billion dollar.


This reserve will be wiped off within 6 to 7 months the way we making CAD and taking loans to fill CAD.

This is long term planning from govt., it might look gloomy but they are doing the right things. Right now they must do anything to facilitate increase in exports, get FDI in country and somehow get Paksteels up. Thats all they can do. Can't do much about rupee value dropping if they don't use reserves.

Sir the export has not increase infact it has decreased . The rupee massively devalued than the export trend started to gown down and import trend start to up.

Btw did you not look the data of FBR? All the custom duty says that import is increased to expensive cars, SUV cars, Luxury hosing stuff, consumption based goods and food items.

 

[The Accountant]

you are talking about service that is yet to come, which will be 1 billion dollar so total import and service 7.3-75 billion dollar in Just one go in August , so trade deficit will be 1.6-2 billion dollar in just one month. So myth that Devaluation stops imports and increase and make export competitive of 3 years excuse is gone.

Sorry my friend, either u doing this intentionally or out of innocence.in any case u r totally wrong.

I mentioned three factors and u r talking about just one.

Furthermore from where u got the figure of 1 billion ? For my company the increased freight cost is around 14%so on average ot is no less than 10% . In dollar terms its 7 billion equivalent to projected CAD.

Impact of other factors is top on that.

This is a formal warning to u. Dont try to twist facts specially pertaining to my post otherwise u will get a negative ratings.

U r free to hate PTI or IK but twisting facts is wrong.

 

[Patriot forever]

Sir the debts they are taking to fill CAD is very short. These all taken from foreign commercial banks and their interest rate is high and lending is very short. Just in July we have taken 1.6 billion dollar debt to pay 600 million dollar for CAD and 1 billion to pay our debts. August number will much higher than this due to that last month Alone CAD will be above 1.5 billion dollar.


This reserve will be wiped off within 6 to 7 months the way we making CAD and taking loans to fill CAD.

Sir the export has not increase infact it has decreased . The rupee massively devalued than the export trend started to gown down and import trend start to up.

Btw did you not look the data of FBR? All the custom duty says that import is increased to expensive cars, SUV cars, Luxury hosing stuff, consumption based goods and food items.

1) Export is quoted in dollars not rupees. Imagine the value of exports in rupees with the exchange rate. The revenue flow in export industries has risen to 50% or more.

2) The value of CBU ( Completely build units of all segments) is very low as compared to CKD ( Completely knockdown units) which are assembled here in Pakistan. This is the right direction and we should all appreciate it. For the first time there is localisation of the upper niche segment ( cross over SUV's, full size sedans etc). This lowers the overall import value but also creates jobs and attracts right kind of FDI. With the current policy it is a matter of time before localisation of parts production kicks in.

One more point TERT disbursement is already happening and will further increase in the coming months, especially as Raza Baqir said will be front loaded in the FY 21-22, that means first half.

 

[Zibago]

Yes but what is about to come will take another 5 years to recover what Shaukat Tarin has done. Just for September numbers and this August was just a trailer.

There is no need to make consumption cheap by wasting billions on currency that is absolutely idiotic move
Look at what happened in Lebanon