US dollar reaches Rs160 in interbank market

[Abdussamad]

This is a reflection of our high inflation rate. With a 7% fiscal deficit financed mainly by borrowing from the central bank inflation was bound to go up. The difference between our inflation rate and the US' is reflected in currency depreciation. US inflation is less than 2%. Ours is close to double digits now.

The other reason is that foreign investors are repatriating dollars before the end of the financial year. So this sudden depreciation since Eid is seasonal in nature. Next up is dollar buying for hajj travels which will also result in depreciation. When the hajj pilgrims return they should bring back unspent foreign currency which should finally bring the rate down a little (although it'll still be higher than today's rate).

 

[VCheng]

Yes. Traditionally it have been this way. Any PKR appreciation sounds unlikely but with market deciding the valuation, the general agreement in market is that it will come to around 145-150 mark by end of the year. Lets wait and see!

To me, the IMF reforms if implemented are actually good for us in long run. Not everything is a Jewish conspiracy!!

I agree, let's wait and see. The "general agreement in market" is wildly optimistic in my opinion.

This is a reflection of our high inflation rate. With a 7% fiscal deficit financed mainly by borrowing from the central bank inflation was bound to go up. The difference between our inflation rate and the US' is reflected in currency depreciation. US inflation is less than 2%. Ours is close to double digits now.

The other reason is that foreign investors are repatriating dollars before the end of the financial year. So this sudden depreciation since Eid is seasonal in nature. Next up is dollar buying for hajj travels which will also result in depreciation. When the hajj pilgrims return they should bring back unspent foreign currency which should finally bring the rate down a little (although it'll still be higher than today's rate).

It is even simpler: supply and demand. People want USD. People do not want PKR. There are lots and lots of PKR available. There is a much tighter supply of USD.

 

[Arsalan]

Because of field as anything below certain region (in your case may be 140) not worth doing in ours till 165-170 and due to any unfortunate thing anything above 175 we gonna closed its simple business that point i try to driven to members market mechanism is hard to understand even for us fully without help tu yahan 2-3 post par ky unhain kiya samjh aana unnecessary panic but love to see tax net expand how much come in amnesty scheme not matter as much as expanding tax net let say we hit over 3 to 5% its much greater achievement for long term

I am not sure about the rumors/news making rounds regarding amnesty scheme however i think the tax net is going to expand signification. Yes there will be loopholes some fish will still slip by and yes all this exercise will open up a channel for corruption if not monitored but overall, the tax net will expand. The policies made if implemented for two years or three will ensure our tax net is expanded and perhaps at that time gov. can think of giving back some relief.

I just hope the gov. builds up good mechanism of these tax relief in these two years time so that when and if it comes back it reaches the right people on all levels

I agree, let's wait and see. The "general agreement in market" is wildly optimistic in my opinion.



It is even simpler: supply and demand. People want USD. People do not want PKR. There are lots and lots of PKR available. There is a much tighter supply of USD.

Traditionally, the market have been more pessimist. So i wont call it to have changed to optimist for now. Lets see!

 

[B.K.N]

People want USD.

Anyone who buys dollars should be declared a traitor

 

[God Parshuram]

One free advice to Pakistan. Go for currency swapping. Import petrol and diesel from India by a long term contract linked with international market price. Invite Japan and Israel to invest in Pakistan. They have very low interest rate so finance shall be available at a rate without time value burden. Go for textile in a big way. Invest in skill development and agriculture and animal husbandry. Though it will take a long time to happen, but go for tourism in big way. Cut down defence expenditure to half and improve relationship with Neighbors. Go for solar power in big way with competitive bidding. Do not invest in steel, electronic etc. Any mistake from here will cost Pakistan heavily.

 

[Abdussamad]

Anyone who buys dollars should be declared a traitor

Arrest them and execute them at dawn via firing squad. No doubt that is your solution to every problem

 

[Yaseen1]

I think it will be very difficult that it will return to previous value unless major reforms are made in economy

 

[B.K.N]

Arrest them and execute them at dawn via firing squad. No doubt that is your solution to every problem

Main to mazak Kar rha tha aap serious hogaye

 

[Chhatrapati]

Government have let it float free. They are not anchoring it down and it should have always been this way. Market is determining the dollar rate now, not state bank.

I don't think it's free float, the government is trying to stabilize the currency to an assumed value before letting it free float. If it's free floated, the sliding will be gradual according to market trends, given nothing really happened in international market and dollar have in fact weakened against most currencies.

 

[El Sidd]

I pay taxes on everything except air.

@AZADPAKISTAN2009 dude you left out taxing clean fresh air which is produced by government tree plantation drive which means government money is being invested and thus beneficiaries should pay services tax.

abhi bohat kuch hona hai..aap itni jaldi ghabra gaye

 

[B.K.N]

All my education is private, my healthcare is private.

Majority of Pakistanis are getting education in government institutions and everyday millions of people visit government hospitals

 

[Arsalan]

I don't think it's free float, the government is trying to stabilize the currency to an assumed value before letting it free float. If it's free floated, the sliding will be gradual according to market trends, given nothing really happened in international market and dollar have in fact weakened against most currencies.

Its free floating, this is confirmed. It was anchored down previously so the conversation rate was not realistic in past. It had to go up even if US$ was losing against other currencies. The increase is also gradual in nature. Not very smooth because of all the open market dealings and some panic buying/selling but it is gradual still

 

[Abdussamad]

Main to mazak Kar rha tha aap serious hogaye

Actually the scary thing is that people in charge actually think like this! They have threatened to raid people's homes and business premises and confiscate any forex they find:

The Finance Bill 2019/20 has proposed to enhance the powers of a commissioner to raid premises after receiving credible information about the presence of undeclared gold, bearer security or foreign currency and confiscate the same.

Source

This is the sort of thing that leads to capital flight as the article rightly points out. Ironically it'll also lead to dollarization.

 

[Chhatrapati]

Its free floating, this is confirmed. It was anchored down previously so the conversation rate was not realistic in past. It had to go up even if US$ was losing against other currencies. The increase is also gradual in nature. Not very smooth because of all the open market dealings and some panic buying/selling but it is gradual still

I assume you are right. I was just reading the graph. In comparison to others.

 

[Abdussamad]

Majority of Pakistanis are getting education in government institutions and everyday millions of people visit government hospitals

He wasn't referring to the majority. He was referring to himself. Those who are being hounded to pay income tax are also the sort of people who can afford private education and private healthcare.