Pakistani rupee plunges to Rs153 against US dollar

[Turingsage]

PKR has devalued almost 50% since Nawaz was outed. How much have the exports increased?

I can tell you one thing that has definitely increased and that is Pakistans Debt. It is now the same as Pakistans GDP

Total debt getting close to size of economy
By Shahabaz Rana
Published: May 21, 2019
TWE

Representational image. PHOTO: REUTERS

ISLAMABAD: Pakistan’s debt and liabilities have risen steeply to Rs35.1 trillion or 91.2% of size of the economy, further deepening concerns over debt trap that has started limiting the government’s policy options.

The statistics released by the State Bank of Pakistan (SBP) at the weekend showed that only from July through March of this fiscal year, there was a net addition of Rs5.2 trillion in the country’s total debt and liabilities, showing 17.4% growth over the debt level of June 2018.

The deteriorations have been witnessed in domestic, external and public sector enterprises debt, both in absolute terms and the size of the national economy, showed the central bank data.

Total debt and liabilities also include public sector enterprises (PSEs) debt, non-governmental external debt and inter-company external debt from direct investors abroad. The government’s direct responsibility was worth Rs28.6 trillion but it is indirectly responsible for most of the remaining debt due to guarantees given by the Finance Ministry and also involvement of the SBP in these borrowings.

The Pakistan Tehreek-e-Insaf (PTI) government had promised to revive loss-making enterprises. By March, total losses of the PSEs surged to Rs1.9 trillion, a net addition of Rs414.2 billion or 28.5% in the past nine months.

Monetary policy: SBP hikes interest rate by 150bps to 12.25%

External debt and liabilities of Pakistan mounted to $105.8 billion as of March 2019, according to the central bank. During the first nine months of this fiscal year, there was a net addition of $10.6 billion in the total external debt and liabilities with a growth rate of 11.1%.

Pakistan’s total debt and liabilities are now equal to 91.2% of its gross domestic product (GDP). Only to service the public debt, the finance ministry spends 36% of the total budget.

Of the Rs35.1 trillion, the gross public debt, which is the direct responsibility of the government, stood at Rs28.6 trillion as of the end of March. The gross public debt was now equal to 74.4% of GDP, far higher than the 60% statutory limit set in the Fiscal Responsibility and Debt Limitation Act of 2005.

There was an increase of Rs3.7 trillion in the gross public debt in nine months, which was far higher than the overall budget deficit recorded during the period. One of the key reasons behind the higher debt was the increase in interest rate and depreciation of the rupee during July-March period of the current fiscal year.

The depreciation of one rupee adds Rs105.8 billion to the public debt. Similarly, a 1% increase in interest rate increases the cost of debt servicing by roughly Rs180 billion. This ultimately increases borrowing requirements for the finance ministry.

The central bank on Monday increased the interest rates by 1.5% aimed at fulfilling the prior condition of the International Monetary Fund (IMF) for qualifying $6 billion bailout package. It will add over Rs260 billion in the debt servicing cost of the finance ministry on the existing stock of the debt.

Since December 2017, the central bank has let the currency weaken by over 40% and has jacked up interest rate by 6%. the exports witnessed negative growth during the current fiscal year.

Excluding the liabilities, the country’s total debt swelled to Rs33.1 trillion, up by Rs4.7 trillion or nearly 16.5% in nine months. The total debt was equal to 85.8% of the GDP.

The government’s domestic debt surged to Rs18.2 trillion with addition of Rs1.8 trillion in first nine months of the current fiscal year. Its external debt increased to a record Rs9.6 trillion by the end of March. Total external debt and liabilities surged to Rs13.5 trillion on the back of currency depreciation and new borrowings.

The SBP data showed that Pakistan’s foreign exchange liabilities doubled to $10 billion by March, an addition of $5 billion since June 2018. The central bank’s deposit-related liabilities increased to $5.7 billion from $700 million.

The Chinese, Saudi Arabian and United Arab Emirates loans are parked on the books of the central bank.

The PSEs’ total debt grew to Rs1.9 trillion at the end of March, an increase of Rs414.2 billion or 28.2% in just nine months. Their domestic debt soared from Rs1.1 trillion to Rs1.4 trillion. Their external debt increased from Rs324.6 billion to Rs489.4 billion.

The debt taken by Pakistan from the IMF increased in rupee terms by Rs70 billion to Rs811 billion due to currency devaluation and despite Pakistan returned a tranche.

Total liabilities, which are indirectly the responsibility of the finance ministry, increased to Rs2.1 trillion by the end of March. There was an increase of Rs625 billion or 43% in the liabilities.

https://tribune.com.pk/story/1977134/2-total-debt-getting-close-size-economy/

 

[Riz]

open market main jo dollars ki sale hoti ha woh fake hoti ha... Actually rozana 70 to 100 million dollars smuggled to Afghanistan then dubai from torkham border... Ik should ban these money changers & exchange companies for 5 month... Pak Rs 100 sa neechy na aya to mera gareeban pakar laina

 

[Baghial]

KARACHI: Pakistani rupee plunged to a new all time-low in the interbank and open market on Tuesday as it continues to lose value against US dollar.

The greenback saw an increase of Rs1.36, touching Rs151. In the open market, the rate increased to Rs153.

In the last four business days, the dollar has risen by Rs9.60 against the Pakistani rupee.

The rupee has been falling against the dollar following an agreement with the International Monetary Fund on a $6 billon loan with expected strict conditions including a “market determined” exchange rate.

https://www.thenews.com.pk/latest/474384-pakistani-rupee-plunges-to-rs153-against-us-dollar

next year we will look back and say ------dollar was very cheap at 200

cas in 2020-------its predicted to be around 220/ 250

 

[wali87]

This PM and his cabinet has anally penetrating this country’s peoples’ in the name of tabdeeli. It seems not only does this government has had the worst performance in the first one year but it seems bound to go down as the worst in history.

It seems Khan was all talk after all. We expected a person who has never run a tuck shop never owned and set up business on his own, never had a job, never bought clothes never had any experience on even ! union level or provincial level management let alone national, to manage and run a country which is plagued with issues.

I feel now politics has become a game of lying. The bigger and more convincing the liar, the more popularity he gains. Pathetic state of affairs l.

 

[VCheng]

It seems Khan was all talk after all. We expected a person who has never run a tuck shop never owned and set up business on his own, never had a job, never bought clothes never had any experience on even ! union level or provincial level management let alone national, to manage and run a country which is plagued with issues.

Please be patient and allow PMIK the rest of his term to deliver results.

 

[Sugarcane]

PKR was at 109 in Nov-2013 and was on downward trend because of economic situation, but glorified munshi Ishaq dar because of rants of opposition started d!ck measuring contest to bring it down and keep it there by borrowing and selling dollars in open market which led to disaster, next FM of PMLN realized and admitted that it was wrong and unsustainable policy and started devaluation, PKR was around 124 (with controlled devaluation) when new government took charge. PTI didn't have anything left in reserves to manipulate money market, otherwise they would have been doing same. The biggest blunder of PTI is that it still haven't done anything to reform money market and have let mafia decide the rates without any check and balance, nor their is any restriction to stop people from converting stashed black money to foreign currency.

Exchange rate 100 or 1000 will not matters much PROVIDED government bring necessary structural reforms to fix the fundamentals.

 

[Vikki]

This PM and his cabinet has anally penetrating this country’s peoples’ in the name of tabdeeli. It seems not only does this government has had the worst performance in the first one year but it seems bound to go down as the worst in history.

It seems Khan was all talk after all. We expected a person who has never run a tuck shop never owned and set up business on his own, never had a job, never bought clothes never had any experience on even ! union level or provincial level management let alone national, to manage and run a country which is plagued with issues.

I feel now politics has become a game of lying. The bigger and more convincing the liar, the more popularity he gains. Pathetic state of affairs l.

I heard Imran khan has taken people from PML N and PPP..
How could you believe a person who has taken in corrupt politicians into his party? Or did you think those corrupt politicians will become saints once they join PTI?Politics is all about corruption in south asia.even kejriwal bastard is corrupt...evryone is noy after money...people like imran are after power.

 

[SecularNationalist]

So basically nawaz sharif is giving imran khan tough time while sitting in jail
A typical vicious cycle when the previous government leaves a lot of shit to clean for the new government.

 

[VCheng]

Exchange rate 100 or 1000 will not matters much PROVIDED government bring necessary structural reforms to fix the fundamentals.

That is the key. The question to ask here is whether the government is capable of bringing about the structural reforms it has promised to IMF to complete.

 

[wali87]

I heard Imran khan has taken people from PML N and PPP..
How could you believe a person who has taken in corrupt politicians into his party? Or did you think those corrupt politicians will become saints once they join PTI?Politics is all about corruption in south asia.even kejriwal bastard is corrupt...evryone is noy after money...people like imran are after power.

Sir I truly did believe that things might change for the better. Call it intentional naivety or hope. But your right when khan started compromising on candidates and his ideology, it did occur to me tht he might not be any different but anyhow. Another vote, another election. wasted.

Please be patient and allow PMIK the rest of his term to deliver results.

The only thing not allowing this government to deliver results is its incompetence. I’ve seen at least 7 government come and go and I feel the first 6 months clearly determine where the country will go in the next 5.

Kinda reminds of zardari government, only worse since they reached this point at the end of the third year.

 

[VCheng]

The only thing not allowing this government to deliver results is its incompetence. I’ve seen at least 7 government come and go and I feel the first 6 months clearly determine where the country will go in the next 5.

Kinda reminds of zardari government, only worse since they reached this point at the end of the third year.

That may very well be the case, but we still need to be patient and allow the present setup its full term in office to judge the results.

 

[Sugarcane]

That is the key. The question to ask here is whether the government is capable of bringing about the structural reforms it has promised to IMF to complete.

Frankly, current government doesn't look capable of doing so, it need to be pushed.

 

[Arsalan 345]

How do you suggest these poor people would gather resources to leave the country when they don't have enough to survive their day to day needs?

This is the biggest problem.i have seen people lots of people who are sick and tired of corruption and unemployment in this country.very bad situation.

 

[NOWorNEVER]

 

[Arsalan 345]

This is such a naive statement... what exactly has common man got to do with exchange rate? In fact if there is anything it should be upper middle and wealthy people who will end up paying more for imported goods and fuel. Everything else in the economy for example a day to day transaction should not really be impacted by rupee devaluation. And if people have to buy local products for a while to improve the economy then that should be the least contribution for a better tomorrow. Leaving the country doesn't mean improvement in life! People who generally come from third world countries tend to end up living in high crime, poor neighborhoods and works extra hours just to put a meal on the table. It is foolishness to sell a bed of roses to unsuspecting people that all will be grand and they will be living like kings cause they won't! by a great majority they will end up spending at least two generations in absolute poverty with their kids turning to small time gangs for protection and support.

I have seen people in trouble.rupee devaluation means price hikes which usually happens in pakistan.i have no idea about America or any other country.you should come here and should experience it by yourself.we are in deep trouble.