PKR falling like a meteorite.

[SuvarnaTeja]

@Norwegian

Norwegian sb,

There was no Imran Khan in Bangladesh, yet they are having economic crisis

Ha, ha that was a nice one. In fact there are more than a dozen countries which are facing serious financial crisis- Panama (a country which I am sure most Pakistanis are familiar), El Salvador, Ghana, Tunisia, Egypt, Lebanon to name a few. None of them have/had an IK as far as I know.

Regards

The mother of all economic crisis is happening in India thanks to Modi.

 

[Wood]

And this is FY22 - not the last few months. So majority of this performance is attributable to IK time in the gov.
Though remittances mean little in my estimation. It is a function of the disfunctionality that we have such a large labor pool in countries outside of Pakistan earning wages. Speaks to the economic weakness within Pakistan. Though helpful in BoP it is hardly a badge of honor.

The supposition here is that remittances have dropped in response to PDM rule and that this drop is the reason for currency depreciation. Thus overseas Pakistanis are meting patriotic punishment to incompetent and imported government.

But SBP says on a YoY basis, remittances for the month of May and June this year have been higher than that of the previous year. These are months of PDM rule. By the above conjecture, this should not have been the case?

The mother of all economic crisis is happening in India thanks to Modi.

Welcome back!

you cant prove it but you can go to any finance lawyer in the country. 90% would give the same old advise of whitewashing your shit! i am on the ground zero buddy, know people who do this ......

You have access to source of income information on roshan accounts and you see that for last 3 months the source of money is not legit? We will have to take your word for it.

 

[TigerOfMysore]

The supposition here is that remittances have dropped in response to PDM rule and that this drop is the reason for currency depreciation. Thus overseas Pakistanis are meting patriotic punishment to incompetent and imported government.

But SBP says on a YoY basis, remittances for the month of May and June this year have been higher than that of the previous year. These are months of PDM rule. By the above conjecture, this should not have been the case?


Welcome back!


You have access to source of income information on roshan accounts and you see that for last 3 months the source of money is not legit? We will have to take your word for it.

Wood help me understand the following:
Why is SBP comparing Jun with May, in order to show a healthy 18% increase?
You do realize that prior to Eid is usually the healthiest of remittance months, as people send money to their households.
So comparing a Jun with May is going to always look great given the early Jul Eid bump.

The real month of month measure is generally flat.

I think remittances are generally going to be robust as they are function on how many Pakistani households run their expenses. The real question is FDI, Roshan Digital accounts and property purchasing by expats. Those are better indicators of PDM government popularity with overseas Pakistanis. Also outflows are also important to understand. In fact I'll argue outflows (profit repatriation) is a good indicator of confidence. If profits are reinvested, then that is a good indicator - if profits are pulled out that is a bad indicator. Also FDI inflows versus outflows.

SBP Tweet:
"In June, they rose to $2.8 bn, increasing by 18% compared to May 22 and 2% compared to Jun 21"

 

[Wood]

Wood help me understand the following:
Why is SBP comparing Jun with May, in order to show a healthy 18% increase?
You do realize that prior to Eid is usually the healthiest of remittance months, as people send money to their households.
So comparing a Jun with May is going to always look great given the early Jul Eid bump.

The real month of month measure is generally flat.

I think remittances are generally going to be robust as they are function on how many Pakistani households run their expenses. The real question is FDI, Roshan Digital accounts and property purchasing by expats. Those are better indicators of PDM government popularity with overseas Pakistanis. Also outflows are also important to understand. In fact I'll argue outflows (profit repatriation) is a good indicator of confidence. If profits are reinvested, then that is a good indicator - if profits are pulled out that is a bad indicator. Also FDI inflows versus outflows.

Please check the tweet, it says 2% increase between Jun 21 and Jun 22. Net cumulative remittance is also up as seen on the other tweet. I cite this data to dispel the myth that currency devaluation is because of a drop in remittance.

I agree that FDI is much better. Infact, India has been able to withstand its twin deficit problem because of a healthy capital account surplus that avoids BoP. PTI has not been successful in achieving this either.

 

[TigerOfMysore]

Please check the tweet, it says 2% increase between Jun 21 and Jun 22. Net cumulative remittance is also up as seen on the other tweet. I cite this data to dispel the myth that currency devaluation is because of a drop in remittance.

I agree that FDI is much better. Infact, India has been able to withstand its twin deficit problem because of a healthy capital account surplus that avoids BoP. PTI has not been successful in achieving this either.

Sorry you are wrong 18% was a Jun to May comparison and Jun to Jun YoY is only 2%.

 

[Wood]

Sorry you are wrong 18% was a Jun to May comparison and Jun to Jun YoY is only 2%.

Yea, that is what I mean. It is a 2% increase. So remittances have not dropped

 

[TigerOfMysore]

Yea, that is what I mean. It is a 2% increase. So remittances have not dropped

2% is a statistical flat indicator. Again given seasonality, inflationary pressure (especially commodity supercycle) all easily explain the 2% increase. In fact I would argue 2% is a troubling growth number given the massive weekly inflationary pressure Pakistnais are facing. If anything it shows a negative, as I think the 2% when inflation adjusted would show a net decrease on an adjusted PPI level, not a positive increase. So I would argue that we are on a Net Net bases with PPI adjusted for inflation the 2% shows a negative trend. Sorry for getting this technical.

 

[Ghazwa-e-Hind]

https://twitter.com/x/status/1553420273919344640

 

[Wood]

2% is a statistical flat indicator. Again given seasonality, inflationary pressure (especially commodity supercycle) all easily explain the 2% increase. In fact I would argue 2% is a troubling growth number given the massive weekly inflationary pressure Pakistnais are facing. If anything it shows a negative, as I think the 2% when inflation adjusted would show a net decrease on an adjusted PPI level, not a positive increase. So I would argue that we are on a Net Net bases with PPI adjusted for inflation the 2% shows a negative trend. Sorry for getting this technical.

So you have assumed that 2% increase is cited in PKR terms and not $ terms. How do we come to that conclusion?

 

[Ghazwa-e-Hind]

So you have assumed that 2% increase is cited in PKR terms and not $ terms. How do we come to that conclusion?

Indian guy,

We know that your investments in Sharif family has failed.

Pakistan will bounce back, in sha Allah. Don't worry about us.

Right now your Modi is under pressure from NATO, and soon to be used as scapegoat/tissue-paper in US-China cold war.

Also, your govt is injecting $100 billion to keep INR from falling/depreciating.

Your Modi jee's dhoti will be in flames soon, and it's about time he starts communal riots/conflicts targeting minorities to divert the issue.

U.S. says some Indian officials ignoring or supporting attacks on minorities

Some officials in India are ignoring or even supporting rising attacks on people and places of worship in the country, a U.S. official said late on Thursday, drawing an angry reaction from New Delhi which called the comments "ill-informed".

www.reuters.com

RBI prepared to spend $100 billion more defending rupee

The rupee has lost over 7% of its value in 2022 and weakened past the psychological level of 80 per US dollar

www.livemint.com

Like I said, Indians will get nothing from worshipping NATO or Israel block. You guys are just sacrifical goat for them.

 

[TigerOfMysore]

So you have assumed that 2% increase is cited in PKR terms and not $ terms. How do we come to that conclusion?

We don't know the answer and it would be good to get SBP to give clarity on this. Though I think it is safe to assume SBP is talking in dollar terms.

A 2% increase even in $ terms does not in any way cover the rupee depreciation over the last two months. Meaning that though remittances have increase by 2% (dollar), and though that means that given the rupee depreciation people are getting more rupees for their dollars, the deflationary pressure on the rupees along with the $ based inflation globally, a 2% increase would not cover that. It does however explain the bump, as I am certain households would have expressed to their foreign earning family member and thereby asked for more remittances. That is one explanation.

A good number from SBP would be # of remittances, # of household receiving remittances. That I think would also be a good # to get and help us understand this trend better.

Right now we all are speculating where that growth is coming from. It could be from Gulf workers, from free lancers (adjusting their rates), from inflows of money laundered, etc. I think Jul and Aug would be good months to see (and given the free fall of rupee I would venture to say July will be a troubling month).

Just to cover the rupees purchasing power remittances should have increased by many fold. Reason being global inflationary pressure on all imports which are priced in dollar terms itself has a downward pressure on dollar purchasing power. So even if you look at this data in $ terms, a greater growth in remittances should have occurred in order to help address $ based inflation. (Forget even the rupees/dollar equation).

 

[Wood]

We don't know the answer and it would be good to get SBP to give clarity on this. Though I think it is safe to assume SBP is talking in dollar terms.

A 2% increase even in $ terms does not in any way cover the rupee depreciation over the last two months. Meaning that though remittances have increase by 2% (dollar), and though that means that given the rupee depreciation people are getting more rupees for their dollars, the deflationary pressure on the rupees along with the $ based inflation globally, a 2% increase would not cover that. It does however explain the bump, as I am certain households would have expressed to their foreign earning family member and thereby asked for more remittances. That is one explanation.

A good number from SBP would be # of remittances, # of household receiving remittances. That I think would also be a good # to get and help us understand this trend better.

Right now we all are speculating where that growth is coming from. It could be from Gulf workers, from free lancers (adjusting their rates), from inflows of money laundered, etc. I think Jul and Aug would be good months to see (and given the free fall of rupee I would venture to say July will be a troubling month).

Just to cover the rupees purchasing power remittances should have increased by many fold. Reason being global inflationary pressure on all imports which are priced in dollar terms itself has a downward pressure on dollar purchasing power. So even if you look at this data in $ terms, a greater growth in remittances should have occurred in order to help address $ based inflation. (Forget even the rupees/dollar equation).

The $ value has appreciated against all currencies. No matter how you look at it, the increase in dollars - when dollar value itself is appreciating - cannot be cited as a reason for PKR depreciation.

Just because the cost of commodities have increased, it does not mean that more $ should be sent to Pakistan. Overseas Pakistanis may not necessarily get paid more in other countries and are themselves struggling with price increases. This is the stagflation problem that all people are dealing with. Despite this, the remittances have increased in absolute terms. It shows that the claim that Pakistani remittances are meant for Imran Khan is a myth. There was no drop in remittance and therefore no substance to the claim that PKR depreciation has anything to do with remittances.

 

[TigerOfMysore]

The $ value has appreciated against all currencies. No matter how you look at it, the increase in dollars - when dollar value itself is appreciating - cannot be cited as a reason for PKR depreciation.

Just because the cost of commodities have increased, it does not mean that more $ should be sent to Pakistan. Overseas Pakistanis may not necessarily get paid more in other countries and are themselves struggling with price increases. This is the stagflation problem that all people are dealing with. Despite this, the remittances have increased in absolute terms. It shows that the claim that Pakistani remittances are meant for Imran Khan is a myth. There was no drop in remittance and therefore no substance to the claim that PKR depreciation has anything to do with remittances.

A 2% increase in remittances can easily be explained away (which is flat hardly an increase) with Pakistani inflationary pressure. And yes as things become more expensive in Pakistan both on rupee and dollar basis, one can extrapolate that family members would request for more money remittances. However though I have already stated, household remittances are not a good measure of confidence in PDM.

FDI, FMCGs reinvestment of profits, RD account balances are the real measure of PDM confidence or lack thereof.
Roshan Accounts is an aggregate number, not net balance in Roshan accounts. SBP is careful not to state what the net balance in RD is.

I think we are now going in circles.
Finally lets see what Jul, Aug and Sept brings us.

 

[ali_raza]

do you have some reading on this? i cant find anything on the internet?

these things are before internet

 

[SoulSpokesman]

@Norwegian

Norwegian sb,

You are from India not Pakistan. Stay neutral

Ha, ha, nice pun again.

Regards