Pakistan Rupee becomes 3rd best-performing Asian currency [Post#126]

[Rinnegan Sasuke]

Wonder where it'll end, so far it's in free fall.

 

[Gabbar Singh]

Surely the big risk now is hyperinflation?

 

[GBK_Fan]

Surely the big risk now is hyperinflation?

Inflation yes not hyperinflation. The PKR is expected to stabilise around 180 and probably peak at 200. As long as Pak sticks with the IMF guidelines the economy is expected to recover

 

[nam]

This Pak rupee falling will definitely motivate businesses to manufacture locally thus helping trade deficit and create local jobs. I can already see this happening.

 

[Pete Rose]

There’ no forex available to maintain the exchange rate, we’ll hit 200 at some stage.

 

[Syed1]

Kafi bad scene hai.... seems like IK government is failing on this front

 

[cricketjoshila]

Kafi bad scene hai.... seems like IK government is failing on this front

Actually its doing good.

Falling PKR will make exports cheaper and hence in long term exports will rise. And SBP not interfering means precious Forex is being saved.

 

[Rinnegan Sasuke]

Actually its doing good.

Falling PKR will make exports cheaper and hence in long term exports will rise. And SBP not interfering means precious Forex is being saved.

Yes, but there is no stabilization in sight. I'm no economist by any means so excuse my ignorance but an uncertain currency is never a good sign.

 

[Mamoon]

Actually its doing good.

Falling PKR will make exports cheaper and hence in long term exports will rise. And SBP not interfering means precious Forex is being saved.

Problem for Pakistan is that it is still reliant on exports like textile and agriculture. Unless and until we develop modern industries like IT, Pharma and auto etc. that India has, we will not achieve economic growth.

 

[Bewal Express]

Problem for Pakistan is that it is still reliant on exports like textile and agriculture. Unless and until we develop modern industries like IT, Pharma and auto etc. that India has, we will not achieve economic growth.

These take years, if not decades. Tell us who has been in power for the last 10 years?

 

[the Great Khan]

Yes, but there is no stabilization in sight. I'm no economist by any means so excuse my ignorance but an uncertain currency is never a good sign.

it has to hit its actual value. Some experts are saying it will go as high as 180 before settling to around 167. Unfortunately this is due to years of negligence, incompetence and down right thievery. The whole strategy is reliant on revenue collection and if they can do that they will be able to get on the right track. if they fail pakistan is in big trouble.

 

[Mamoon]

These take years, if not decades. Tell us who has been in power for the last 10 years?

Pakistan's economic growth has been hampered because of military interference.

 

[Bewal Express]

Pakistan's economic growth has been hampered because of military interference.

Rubbish- Look at the PK growth from 47 until Zia died and you will see it outstripped anything in the so called Democratic era. In the Ayub era, we had the Koreans come to PK to look at our Model.

 

[WebGuru]

Comes down by 6-8 rupees today to 156-157

I think the hike in last few days is because many businesses need to make lot of payments in dollar by the end of this fiscal year (30 June)?

 

[Technics 1210]

Rubbish- Look at the PK growth from 47 until Zia died and you will see it outstripped anything in the so called Democratic era. In the Ayub era, we had the Koreans come to PK to look at our Model.

There is no point in presenting the haters with facts. Nothing matters to them other than the demise of Pakistan.

 

[GBK_Fan]

Comes down by 6-8 rupees today to 156-157

I think the hike in last few days is because many businesses need to make lot of payments in dollar by the end of this fiscal year (30 June)?

SBP intervened

 

[HussainRx8]

Not sure what the surprise is here. We went from a dirty peg to a floating exchange rate regime.

The PKR-USD is now determined based on the supply and demand. The government has no control over it. As the current account deficit narrows and capital account picks up, it will settle at the equilibrium rate.

This short run is volatility is mainly driven by speculators. They are taking a short position on PKR. USD has also appreciated recently as foreign investors buy USD denominated assets.

Think of it as short term pain for long term gain.

 

[WebGuru]

SBP intervened

That's a possibility IK had 2 meetings with the head of SBP in last 2 days the pressure created by media was too much to handle.

 

[cricketjoshila]

That's a possibility IK had 2 meetings with the head of SBP in last 2 days the pressure created by media was too much to handle.

IK has my sympathies. He is doing right by letting the PKR find its own level. But media is creating unnecessary pressure and SBP is spending precious forex, a lot of which is short term deposit from China Saudi UAE Qatar to defend the PKR.

 

[WebGuru]

IK has my sympathies. He is doing right by letting the PKR find its own level. But media is creating unnecessary pressure and SBP is spending precious forex, a lot of which is short term deposit from China Saudi UAE Qatar to defend the PKR.

During PMLN govt our finance minister wise Ishaq Dar kept rupee overvalued at fix rate and burned forex he escaped to London in final year of the govt and is now staying in London because he can't face the corruption and money laundering cases against him.

His policies made sure our imports go to all time high at $61b while exports touch the buttom at $20b to create massive deficit. Its the 18 to $20b per year remittance by overseas Pakistanis that is providing oxygen to our economy. This year alone our current govt paid back $9.5b debt which is a record by any Pak govt and they came in power just a year ago now they need to find a way to pay back $27b in next 2 years.

 

[Mamoon]

Rubbish- Look at the PK growth from 47 until Zia died and you will see it outstripped anything in the so called Democratic era. In the Ayub era, we had the Koreans come to PK to look at our Model.

The economic growth under military dictatorship was aided by U.S. funding. We were essentially getting bribed for assisting them in the Cold War and the WOT. It is not a sustainable model for achieving economic growth.

 

[Bewal Express]

The economic growth under military dictatorship was aided by U.S. funding. We were essentially getting bribed for assisting them in the Cold War and the WOT. It is not a sustainable model for achieving economic growth.

So the Koreans came to PK to see how to get American aid under Ayub. Lik

 

[Bewal Express]

During PMLN govt our finance minister wise Ishaq Dar kept rupee overvalued at fix rate and burned forex he escaped to London in final year of the govt and is now staying in London because he can't face the corruption and money laundering cases against him.

His policies made sure our imports go to all time high at $61b while exports touch the buttom at $20b to create massive deficit. Its the 18 to $20b per year remittance by overseas Pakistanis that is providing oxygen to our economy. This year alone our current govt paid back $9.5b debt which is a record by any Pak govt and they came in power just a year ago now they need to find a way to pay back $27b in next 2 years.

Munshi destroyed PK economy with disastrous policies, Kaptaan has been tasked to rescue PK again. Unfortunately it took years to wreck the economy and it will years to repair. I don't think we are anywhere near the peak pain before we can begin to sustainably grow.

 

[Gabbar Singh]

Munshi destroyed PK economy with disastrous policies, Kaptaan has been tasked to rescue PK again. Unfortunately it took years to wreck the economy and it will years to repair. I don't think we are anywhere near the peak pain before we can begin to sustainably grow.

Khan and his government appear genuine in their efforts to sort the economic mess out. The nightmare scenario however from their pov would be if they take the tough measures needed to get things back on track only to then be voted out of office by a short sighted and impatient electorate. The next government may then ruin all the hard work done and go on a spending spree.

What's the feeling on the ground? Do the electorate understand why the present government have had to do things like cut subsidies, increase tax etc?

 

[HussainRx8]

The economic growth under military dictatorship was aided by U.S. funding. We were essentially getting bribed for assisting them in the Cold War and the WOT. It is not a sustainable model for achieving economic growth.

Dude, have you pored over the data here, are you repeating what you heard somewhere else? Official development assistance (ODA) was about 0.5% of GDP during that time.

Economics doesn't lend itself to idle remarks.

 

[Bewal Express]

Khan and his government appear genuine in their efforts to sort the economic mess out. The nightmare scenario however from their pov would be if they take the tough measures needed to get things back on track only to then be voted out of office by a short sighted and impatient electorate. The next government may then ruin all the hard work done and go on a spending spree.

What's the feeling on the ground? Do the electorate understand why the present government have had to do things like cut subsidies, increase tax etc?

My friend who came over from PK recently said it was a possibility, but I say it's a price worth paying and maybe just maybe, the crooked har****, may not be so bad, if they come back. But someone has to take the tough and painful decisions and as I said peak pain is still not been reached.

 

[Rinnegan Sasuke]

My friend who came over from PK recently said it was a possibility, but I say it's a price worth paying and maybe just maybe, the crooked har****, may not be so bad, if they come back. But someone has to take the tough and painful decisions and as I said peak pain is still not been reached.

If that turns out to be the case wouldn't it render all the steps being taken null and void and back to the same old scenario? A second term is imperative and this government should keep that in mind with its policies,

 

[Bewal Express]

If that turns out to be the case wouldn't it render all the steps being taken null and void and back to the same old scenario? A second term is imperative and this government should keep that in mind with its policies,

I think IK has changed the PK body politic forever and there will be no going back to the mass looting of the AZ- NS years. In the age of uncontrolled social media, the clock cant be turned back.

 

[Napa]

Rubbish- Look at the PK growth from 47 until Zia died and you will see it outstripped anything in the so called Democratic era. In the Ayub era, we had the Koreans come to PK to look at our Model.

This is just a superficial view, lacking an understanding of how economies evolve. As usual, [MENTION=131701]Mamoon[/MENTION] is right on political/economic matters and you are wrong.

It is easy to achieve high growth rates starting from a small base.

At the time of independence, Pakistan like India and Bangladesh had a very small industrial base. So it was easy for a few new steel mills and hydroelectric dams to create the impression of high growth rates. The same thing happened in India, where "Nehruvian Socialism" led to the government babus controlling the economy. Initially there were high growth rates, but in absolute terms the growth was small. Growth rate measures current in terms of previous, so it is not absolute but only a relative measure.

"Nehruvian Socialism" also led to very high poverty rates of over 60%, and a financial crisis for India in the early 1990s when there were only enough forex reserves for a few weeks of imports (similar to the one Pakistan is now facing) and Manmohan Singh airlifted the country's gold reserves to Switzerland as collateral for foreign loans.

Looking deeper than the facade of growth rates one should look at what modern industries were created? Was Pakistan exporting millions of dollars of pharma, autos, software etc.? It wasn't, because an Army dominated economy cannot progress beyond low-tech to large scale modern industries. Pakistan cannot do it, Egypt cannot do it, Algeria cannot do it...

The issue is not whether NS or Zardari looted the public treasury. The issue is whether the conditions for FDI are being created which will lead to the growth of modern industries. Imran's performance on this front has been a big fat ZERO.

The reason that India's Rupee today is Rs. 68.95 and not Rs. 168.95 to 1 USD is the hundreds of thousands of Indians in India employed by IBM, Microsoft, Accenture, Google etc. For many years now IBM has had more employees in India than it has in the US.

https://gadgets.ndtv.com/others/new...does-in-its-home-nation-the-us-report-1756817

India changed because of the 1990s financial crisis and gradually freed its economy from the government (though the government still has too much power and regulations). Modi is continuing the work of freeing the economy.

Pakistan however cannot make the change that India made because its Army is not going to give up its privileged position easily.

Bangladesh has progressed because their Army mostly stays out of civilian matters, either because their Generals are different or because Hasina has tamed them.

The problem with the Pakistani Army/ISI is that they try to be over-smart. "Yeah, sure... we will keep arming the Taliban which kills US soldiers while denying this to the US and taking their money". "We will send terrorists to Mumbai but then tell the Indians to prove our complicity".

The fact is that the rest of the world is not as stupid as they think. At some point the US and India will pay them back through FATF, support for terrorism within Pakistan, sanctions, no FDIs etc., and then they can cry all they want that they are being victimized to no avail.

Pakistanis can choose to continue being deluded, but if they want to make progress the civilians have to tame their Army.
[MENTION=76058]cricketjoshila[/MENTION]

 

[Ryw]

Karachi: Interbank Dollar climbs up from 161.50 to 165.50

 

[The Viper]

<a href="https://ibb.co/0ty1Nzv"><img src="https://i.ibb.co/tXpnf1F/a8ff7c70-26df-4cef-9a23-d113e0377aaa.jpg" alt="a8ff7c70-26df-4cef-9a23-d113e0377aaa" border="0"></a>

 

[PetroDollars]

pakistan needs to use its weak rupee in its favor and boost its exports,

 

[MP2011]

We are currently at around INR 76 for a US$. The bigot once cited MMS's age while castigating him for falling Indian rupee vis-a-vis American dollar.

Wonder why he has shut his trap now? Hard work versus Harvard! Lol.....

 

[Kianig89]

Exchange experts should we purchase $$$ as a long term investment
Already missed an opportunity during 2018election when it went from 108 tp 156 in a few months

 

[MenInG]

The rupee hit a five-month high on Wednesday as the dollar was trading at Rs163.20 in the interbank market, data from the Exchange Companies Association of Pakistan (ECAP) showed.

“Steps taken by the State Bank of Pakistan are positive and the new rules and regulations discouraging illegal currency movement in the country have helped the rupee in the last few weeks,” ECAP Chairman Zafar Paracha said while speaking to Dawn.

Better foreign currency inflows and lower outflows due to declining imports and debt repayments have also bolstered the outlook for the local currency.

The rupee has remained stable over the last two weeks, trading below Rs165 in the interbank market after peaking at Rs165.05 on October 1.

Meanwhile, the grounding of airlines across the world due to the coronavirus pandemic has also encouraged expatriates working in other countries to send foreign currency through formal channels, added Paracha. He said in the pre-Covid days, a huge chunk of these inflows was arriving into the country through illegal channels of hundi and hawala.

Pakistan has received significant inflows in the form of remittances in the last three months. Cumulatively, inflows during July-September jumped 31.1 per cent year-on-year to $7.174 billion compared to $5.452 billion in the corresponding period last year, State Bank of Pakistan (SBP) data showed.

However, Paracha said the government should work on increasing exports to earn foreign exchange through a reduction in duties and pushing 'Make in Pakistan'.

Demand for foreign currencies has fallen after the G20 deferred Pakistan’s debt payments of around $2 billion till December. Moreover, World Bank President David Malpass on Monday said G20 creditor countries were also considering an extension in the debt suspension initiative for another six months.

https://www.dawn.com/news/1585035/r...-against-dollar-as-greenback-falls-to-rs16320

 

[Bewal Express]

Exchange experts should we purchase $$$ as a long term investment
Already missed an opportunity during 2018election when it went from 108 tp 156 in a few months

So you missed an opportunity to damage your own country. Typical Noora mentality

 

[Bewal Express]

The rupee hit a five-month high on Wednesday as the dollar was trading at Rs163.20 in the interbank market, data from the Exchange Companies Association of Pakistan (ECAP) showed.

“Steps taken by the State Bank of Pakistan are positive and the new rules and regulations discouraging illegal currency movement in the country have helped the rupee in the last few weeks,” ECAP Chairman Zafar Paracha said while speaking to Dawn.

Better foreign currency inflows and lower outflows due to declining imports and debt repayments have also bolstered the outlook for the local currency.

The rupee has remained stable over the last two weeks, trading below Rs165 in the interbank market after peaking at Rs165.05 on October 1.

Meanwhile, the grounding of airlines across the world due to the coronavirus pandemic has also encouraged expatriates working in other countries to send foreign currency through formal channels, added Paracha. He said in the pre-Covid days, a huge chunk of these inflows was arriving into the country through illegal channels of hundi and hawala.

Pakistan has received significant inflows in the form of remittances in the last three months. Cumulatively, inflows during July-September jumped 31.1 per cent year-on-year to $7.174 billion compared to $5.452 billion in the corresponding period last year, State Bank of Pakistan (SBP) data showed.

However, Paracha said the government should work on increasing exports to earn foreign exchange through a reduction in duties and pushing 'Make in Pakistan'.

Demand for foreign currencies has fallen after the G20 deferred Pakistan’s debt payments of around $2 billion till December. Moreover, World Bank President David Malpass on Monday said G20 creditor countries were also considering an extension in the debt suspension initiative for another six months.

https://www.dawn.com/news/1585035/r...-against-dollar-as-greenback-falls-to-rs16320

I think as a country we should be looking at bringing down to 140. But that would require a huge increase in exports.

 

[JaDed]

I think as a country we should be looking at bringing down to 140. But that would require a huge increase in exports.

If US passes another stimulus that can happen without Pak govn doing anything..

 

[Slog]

If US passes another stimulus that can happen without Pak govn doing anything..

Why do you say that? By your logic (and tbh that was considered traditional logic) this should’ve already happened earlier. US is printing money like crazy however inflation has barely moved.

 

[Bewal Express]

Why do you say that? By your logic (and tbh that was considered traditional logic) this should’ve already happened earlier. US is printing money like crazy however inflation has barely moved.

Its a question i pondered when the initial Quantitative easing took place in 2008 and i am not sure what the professional theory is but i think its 2 things- one is confidence( when Mugabe printed his money people knew their was chaos around the corner) and the other is excess capacity in these economies( as their productivity is very high) which fits in with traditional Keynesian theory that the money supply is not the cause of inflation. On the other hand countries that print money should suffer a depreciation in their currencies but as all the major countries did it, the status quo remained.

 

[Technics 1210]

If US passes another stimulus that can happen without Pak govn doing anything..

Yes, it's called strength through attricition. The same applies for INR, its alleged strength is derived from USD/EUR/GBP/YEN weakness when in reality the INR isn't worth the kak it's printed on.

 

[JaDed]

Why do you say that? By your logic (and tbh that was considered traditional logic) this should’ve already happened earlier. US is printing money like crazy however inflation has barely moved.

Because of the supply and demand isn’t there, after 2008 demand for oil increased thereby saving US dollar as supply and demand were managed but now if they print Trillion and there is no demand for oil or their tech(as much) how will it remain strong? Also this is just my view am not an economist.

Yes, it's called strength through attricition. The same applies for INR, its alleged strength is derived from USD/EUR/GBP/YEN weakness when in reality the INR isn't worth the kak it's printed on.

Yea.. ,. first world countries dominate currency wars except China.

 

[Syed1]

162.5 today... Can we reach pre-covid rate of 155.


Better than the min of 168 seen during height of covid.

 

[Napa]

Fisher’s open hypothesis says that the PKR will keep depreciating against the dollar as the Pakistani nominal interest rates (and inflation) are higher.

The exchange rate is only an side effect. Actual number to pay attention to is the dollar value of exports.

 

[Abdullah719]

Phoenix Rising: Appreciation of the Pakistani Rupee

Not really a rise of the phoenix moment, yet the appreciation of the Pakistani rupee against the US dollar is an uncommon occurrence. Reviewing month-end exchange rates between the local currency and the greenback from 1982 onwards, from a sample of 466 monthly observations, the rupee appreciated in a quarter of observations, while it lost value around 75 percent of the time.

During October 2020, the local currency appreciated by 3.4 percent against the dollar, which is its third-highest monthly appreciation since 1982. This spike is only eclipsed by a 6.6 percent jump recorded in March 2014, and a four percent hike in October 2001. On average, the currency depreciates by 0.6 percent on a monthly basis, largely tying up with annual average depreciation of seven percent.

The scatterplot shows that the monthly movement of the rupee against the dollar usually remains around its mean of 0.6 percent, mostly depreciating, rather than gaining value. Even in the case of outliers, depreciation outlier events outweigh appreciation events a by a significant margin. The magnitude of depreciation is also much higher than that of appreciation, on a monthly, as well as on a rolling three-month basis. Anecdotal observations and heuristics that the local currency mostly depreciates is further supplemented by thirty-eight years of empirical data of monthly movements.

The recent run-up of Pak Rupee is underpinned by multiple factors, from improving exports and remittance proceeds, to lower oil prices and contraction in imports. A move towards market-oriented approach by the central bank with minimal intervention is also being touted as a key factor, with the market determining the rate on the basis of demand-supply dynamics.

With a Real Effective Exchange Rate of 94.1199 as of September 2020, the local currency had been relatively undervalued for a while now – the recent strength in its value has pushed it closer to its fair value. Just how long it can keep up the trend, is anyone’s guess!

https://www.brecorder.com/news/40031058/phoenix-rising-appreciation-of-the-pakistani-rupee

 

[Abdullah719]

Rupee becomes 3rd best Asian currency

Pakistani rupee became the third best-performing currency in Asia after the currency hit almost eight-month high at Rs158.91 against the US dollar in the interbank market on Monday, experts said.

https://tribune.com.pk/story/2271680/rupee-becomes-3rd-best-asian-currency

 

[Syed1]

162.5 today... Can we reach pre-covid rate of 155.


Better than the min of 168 seen during height of covid.

Getting there slowly and steadily.


Who remembers how the ruppee was 60 during Mush era. Then came democracy and both parties took turns ruining the country. Thank God those days are behind us. I hope Pakistanis use their brains when going to the polls in 2023. These dynastic parties will automatically die out if they remain out of power for two three consecutive terms.

 

[The Bald Eagle]

The US dollar shed another 14 paisas in the interbank trading on the first day of the business week and the greenback reached Rs278 against the Pakistani Rupee.

The Pakistan-IMF Staff Level Agreement after successful negotiations in Islamabad has helped to revive the investors’ confidence in the local economy along with the SIFC initiatives for Foreign Direct Investments (FDI) and the newly-elected government’s resolve of one-window operations for ease of doing business in Pakistan are few steps by the country’s civil-military leadership for taking the economy on the right track.

Source: Dawn News