Pakistan's forex reserves hit all-time high of $18.25 billion

[SMC]

Ok, and what's the contradiction there? I see you've made a diversion since you were proven wrong.

WHen I say the loans were first put into forex reserves, I mean they were not meant to shore up forex reserves, but rather forex reserve was just a holder for the money until they are directed toward balance of payment crisis. In other words, net effect is that they did not go toward forex reserves.

The money was not meant for budget deficit but rather balance of payment crisis. Since we got this loan in 2008, I could not recall correctly. But yes, after looking at it again, it was meant for balance of payment crisis, which is perfectly normal to expect from IMF.

 

[SMC]

ares, you should try discussing the real issue here rather than getting into personal arguments.

 

[ares]

Ok, and what's the contradiction there? I see you've made a diversion since you were proven wrong.

WHen I say the loans were first put into forex reserves, I mean they were not meant to shore up forex reserves, but rather forex reserve was just a holder for the money until they are directed toward balance of payment crisis. In other words, net effect is that they did not go toward forex reserves.


The money was not meant for budget deficit but rather balance of payment crisis. Since we got this loan in 2008, I could not recall correctly. But yes, after looking at it again, it was meant for balance of payment crisis, which is perfectly normal to expect from IMF.

You still don't see the contradiction, let me explain up until I explained how the forex reserves works you were pretty adamant that only small percentage of money went to forex reserves but after that you changed your tone to 'oh the money first went to forex reserve and then direct towards BOP' ..which as a matter of fact did not happen because for you to start tapping into IMF money..your own forex will have to empty..which did not happen..IMF money was shored into reserves as a back up just in case your own reserves bottomed out.
Now if you can provide me with a date and link on when your own reserves became zero ..I will believe you.


But bottom line(or the real issue) here is which shall end all debte is

when you pay back money to IMF... where will that money come from??

If your answer is forex reserve(and it better be)..then all your previous arguments about IMF money not being part of forex reserve are nullified.

 

[Vibs]

So you accept that the IMF loans were for balance of payment crisis. The IMF loans were first loaded onto forex reserves, but then later on used where they need to be used. So why do you keep saying that the loans make up 45% of the reserves, then?

Duuude...Let me make my stand clear to avoid any more confusion and ego tussle.

1.When IMF provides aid it is used as forex. Balance of payment is inherently linked to forex. IMF aid cannot be used for other purposes. The economic reforms and restructuring that is done is to be done by the country's own resources. This is what IMF forced Zimbabwe and Somalia to do in which these countries failed.
I took the figures by referring to your own post. I have not been able to verify an independent source so I will not attach figures here. But any IMF aid that has been sought will be subject to the conditions above.

2.When a country says part of the forex is not Pakistani/their own country's money then it implies it is borrowed

3.While Pakistani reserves seem healthy, a large part of the Pakistani money is from remittances of non-resident Pakistani's. This is not sustainable. If Pakistan sustains this by increasing the ratio in favor of trade payments (which seems to be the trend) only then can this positive trend be sustained.

 

[ares]

ares, you should try discussing the real issue here rather than getting into personal arguments.

Nothing personal ..you just don't want to admit your mistake even after you are proven wrong..will rather give some lame excuse afterwards" oh I said this but I meant this or 'it happened long time ago so I don't remember correctly "...this is what irks me.

 

[SMC]

You still don't see the contradiction, let me explain up until I explained how the forex reserves works you were pretty adamant that only small percentage of money went to forex reserves but after that you changed your tone to 'oh the money first went to forex reserve and then direct towards BOP' ..which as a matter of fact did not happen because for you to start tapping into IMF money..your own forex will have to empty..which did not happen..IMF money was shored into reserves as a back up just in case your own reserves bottomed out.
Now if you can provide me with a date and link on when your own reserves became zero ..I will believe you.


But bottom line(or the real issue) here is which shall end all debte is

when you pay back money to IMF... where will that money come from??

If your answer is forex reserve(and it better be)..then all your previous arguments about IMF money not being part of forex reserve are nullified.

How will we pay money to IMF? From economic growth in the future.

What do you mean I was pretty adamant that only small percentage went to forex reserves? I am still saying that, because that's what happened. Ok, so you're saying that it never left the forex reserves, yes? So how did we take care of the balance of payment crisis? Because that's what the loan was meant for.

 

[SMC]

Duuude...Let me make my stand clear to avoid any more confusion and ego tussle.

1.When IMF provides aid it is used as forex. Balance of payment is inherently linked to forex. IMF aid cannot be used for other purposes. The economic reforms and restructuring that is done is to be done by the country's own resources. This is what IMF forced Zimbabwe and Somalia to do in which these countries failed.
I took the figures by referring to your own post. I have not been able to verify an independent source so I will not attach figures here. But any IMF aid that has been sought will be subject to the conditions above.

Ok, so the money is used as forex, and that's what happened with the IMF loans wrt forex reserves. What's the problem here, then?

2.When a country says part of the forex is not Pakistani/their own country's money then it implies it is borrowed

Ok, and when did Pakistan say that?

3.While Pakistani reserves seem healthy, a large part of the Pakistani money is from remittances of non-resident Pakistani's. This is not sustainable. If Pakistan sustains this by increasing the ratio in favor of trade payments (which seems to be the trend) only then can this positive trend be sustained.

Sure, yes.

 

[SMC]

Nothing personal ..you just don't want to admit your mistake even after you are proven wrong..will rather give some lame excuse afterwards" oh I said this but I meant this or 'it happened long time ago so I don't remember correctly "...this is what irks me.

What mistake did I make? That loans did not go into forex reserves? That's not a mistake, that's a reality. The forex reserves were just used to hold the loans, before the loans were used. So the loans indeed did not go into forex reserves.

If you put $100 in your bank account one day, and take it out the next day, does it mean a year later, the $100 is still in your bank account? Quit wasting your time ares. You have been proven wrong, but you'll probably never give up because it hurts your ego.

 

[Vibs]

Ok, so the money is used as forex, and that's what happened with the IMF loans wrt forex reserves. What's the problem here, then?



Ok, and when did Pakistan say that?



Sure, yes.

Glad we agree on some fundamentals.

Heres the link I keep referring to. I thought you had posted this,but someone else had.My bad.

“When you say record-high forex reserves, you have to be realistic as well, as out of the reserves nearly $8 billion is the amount we have borrowed from IMF (International Monetary Fund) and then there are other foreign loans, so we can say around 55 per cent of the reserves are Pakistan's, the rest is on loans,” said Khalid Iqbal Siddiqui, director at Invest and Finance Securities Ltd.
Forex reserves sustainability a cause for concern | Business | DAWN.COM

 

[SMC]

I already discussed this link before many times.

I will go over it briefly again.

The analyst is essentially saying that the IMF loan is still sitting in the forex reserve, while we took care of balance of payment crisis through some other means. 8 billion (the amount we've got till now from) is about 45% of Pakistan's forex reserves, which is where he's getting that 45% figure. What he doesn't say is that the IMF loans, or at least the majority of it, have already left the forex reserves. Read his statement carefully, it's an overly simplistic statement from him.

 

[Vibs]

I already discussed this link before many times.

I will go over it briefly again.

The analyst is essentially saying that the IMF loan is still sitting in the forex reserve, while we took care of balance of payment crisis through some other means. 8 billion (the amount we've got till now from) is about 45% of Pakistan's forex reserves, which is where he's getting that 45% figure. What he doesn't say is that the IMF loans, or at least the majority of it, have already left the forex reserves. Read his statement carefully, it's an overly simplistic statement from him.

Ok. Since I don't have any other source for this data I am not gonna contradict it. If there are no IMF or other loans making up the forex then it's a good sign with only the problem of being Non resident remittance heavy rather than trade heavy.
If there are IMF loans then there is a cause for concern.

 

[ares]

How will we pay money to IMF? From economic growth in the future.

What do you mean I was pretty adamant that only small percentage went to forex reserves? I am still saying that, because that's what happened. Ok, so you're saying that it never left the forex reserves, yes? So how did we take care of the balance of payment crisis? Because that's what the loan was meant for.

Never mind that now ..you will never accept it anyway

Just answer the a simple question.. I am asking for the third time...which you have trying to avoid.

When you have to pay back this loan ..

which currency will you pay it in?
Which bank/reserve will pay it back?

 

[SMC]

If it's not relevant, which it isn't, I won't answer. It's a diversion.

 

[AmberDutt]

The problem is that you guys are looking it all wrong. There are 2 aspects to this. Forex Liquidity and Net Forex Assets. Now Liquidity wise, Pakistan has 18 billion worth of Forex reserves, which means it has forex available to it for usage, where ever needed. The source of Forex does not matter.

The 2nd aspect i.e. the Net Forex assets is a little trickier. This is the forex reserves with the central bank less the total external debt of the country. In pakistan's case, this figure comes to about - 42 Billion USD . Basically 18 billion (forex reserves) - 60 billion (external debt). This is where the IMF debt etc come in. As a matter of fact the article is wrong when it says that 50% of Pakistan's reserves are made of debt. Actually its much more. Pakistan's external debt is almost 4 times its foreign reserves.

 

[ares]

S

If it's not relevant, which it isn't, I won't answer. It's a diversion.

Oh it is very relevant and you wont answer the question because answering this question will nullify your entire argument.

Answer to this question is you will payback IMF in USD ie forex and we all know where forex is found ie forex reserve. If I am wrong then prove it.