Pakistani rupee getting strong, soon to hit 150 against the dollar

[Pakistan Space Agency]

Hahaha .. GBP to PKR comparison! That too after GBP jumped against USD and EUR! Why don't you put in the August 2018 and Now conversion rates of GBP v USD & EUR?

Our imports are not in GBP! Stick with the currency we do international trade and that is USD!

Well, I am British.

 

[Verve]

Well, I am British.

You are irrelevant, that's what you are!

 

[Syed1.]

Well, I am British.

Then who the hell gave you the right to run mouth against Pakistan?

 

[YeBeWarned]

@HRK @ziaulislam if Rupee get its value back gradually , with foreign reserves been stable, less debt and interests of loans than Devaluation of dollar will be beneficial .

You are irrelevant, that's what you are!

Good one, bro ..

 

[ziaulislam]

I have done a linear graph for recovery of rupees based on various projects and investment Projections. If economy continues to stabilize and move toward growth, we might see rupee going down to 100 by 2023



our system is rotten to the core.

View attachment 593802

only way to fix it is either go to harsh MarshalLawPlus plan or go toward Saudi system of public punishment.

Which will put us back where we are...so rupee should be floated freely on demand and supply and no artificial change should be done

Focus sjould be on productivity

If you want to compete some countries even devalued on purpose time and again like china

 

[Old School]

It is very difficult to judge the actual value of PKR by looking at the exchange rates alone. PKR has never been a truly free floated currency based on market fundamentals. You guys also need to read this:
New central bank governor Reza Baqir on Monday dismissed the idea of a free floating rupee as he outlined reforms aimed at ending instability in the South Asian economy.
https://www.reuters.com/article/pak...misses-free-floating-rupee-idea-idUSL8N23O5CZ

 

[HRK]

@HRK @ziaulislam if Rupee get its value back gradually , with foreign reserves been stable, less debt and interests of loans than Devaluation of dollar will be beneficial .



Good one, bro ..

in most simple term consider it in the light of supply and demand rule once consistent supply of dollars to Pakistan increase than the total demand of Pakistani market then dollar rate will come down ....

Now second part of your question it depend on the economic need and priority of the government of that time .... IF increasing the standard of living of common people without negatively affecting the economy of gets the priority then the government of that time could take this decision otherwise maintaining the exchange rate to maintain the standard of living will get preference

 

[ps3linux]

From what I remember is that exchange rates in Pakistan are not truly free float it is a mix of demand/supply and regulator; in accordance with SBP order of 1948 and further amendments SBP is the regulator for Forex. Exchange rates for a developing rather under developed economy like Pakistan have more considerations as compared to one liner wish list that dollar becomes cheaper and some thoughts on the matter are:

· Our exports mix is primarily focused on low cost cotton products (apparel, bedsheets, overalls, t shirts) with little or no RMG meaning we must spend less in dollar terms and export more in volumes to get maximum dollars. Major mix of export is focused on $6 /item products (ballpark) one of the major cost besides raw material/fixed cost is labor cost, which is almost fixed in PKR, however if the $ exchange rate comes down to say PKR120 major cost of the exporter will be labor thus he will not be recovering his overall cost and will not be able to compete in the international markets thus our exports will start declining again at least in this segment.

· Every country which has succeeded in developing an export based economy (barring mineral resource exports based economies) had done it by keeping their currency undervalued, means higher exchange rates vs dollar, Pakistan shouldn’t be any different.

· With a semi free float exchange rates, exchange rate is based upon sentiments of the people having major holding of dollars besides PPP value, in Pakistan speculators and currency exchanges, previous exchange rates of 160+ had more to do with speculators, everyone wanted to “invest” in dollars which was creating a demand/supply gap thus pushing the prices up, now it’s the other way round speculators and currency exchanges have sold over 2.5 billion dollars to SBP through respective windows.

· Lower exchange rates tend to encourage imports which at this point in time is not beneficial for Pakistan as we are still trying to manage our import/exports and our forex liabilities.

· I will not go into to the nitty gritty of economics but there is about $2 billion hot money invested in GoP paper as exchange rates decreases those vultures make more returns, first by investing in a risk free paper through IPS accounts with double digit returns, secondly with the principal and interest earned from GoP paper they will be able to buy more dollars if the dollar price has gone from say 155 to 150.

· As a nation we are very comfortable with hypocrisy and that too blatant, news channels are reporting Forex reserves as 16 billion plus whereas the actual are something like 8 billion plus minus, rest are deposits of banks and financial institutions and practically GoP cannot access those reserves unless it passes a stupid law like Noora did back in 98. We are in a better position when it comes to Forex reserves but we are not out of the woods yet, and for that we will have to start developing our exports beyond textile and labor.

· Nutshell I am less worried about exchange rates and more about the incompetent/apathic way in which inflation is being managed by the incumbent Govt.

 

[darksider]

Key difference being Dar unnaturally kept the ruppee inflated when its actual worth had fallen thereby burning through precious foreign exchange to defend the ruppee.


Now if due to improved economic performance if the ruppee naturally returns to 120 then it wont be as bad as holding it at 120 unnaturally. The two situations are not comparable.

Infact naturally bringing ruppee value down to about a 100 in the next 5-7 years should be ideal.

We need inflation under control very at this point.
Cost of living is increasing to point people will think why they gave vote to Imran khan.
Its time they have to do something about inflation.

 

[Haris Ali2140]

We need inflation under control very at this point.
Cost of living is increasing to point people will think why they gave vote to Imran khan.
Its time they have to do something about inflation.

Short term or Long term solutions???
Which one do you want???

 

[darksider]

Short term or Long term solutions???
Which one do you want???

Problem is there is no long term vision in Pakistan.
Every five year we will have different policies and agendas.
But i hope Pakistan can implement long term policies.

 

[Haris Ali2140]

Problem is there is no long term vision in Pakistan.
Every five year we will have different policies and agendas.
But i hope Pakistan can implement long term policies.

Short term is to give subsidies which was implemented by the pervious governments. But this government doesn't have the money to give subsidies.

Long term is to establish industries and create jobs. This will have a chain effect on every aspect of economy. But this long term solution requires time to start.