In 2017 Turkish Lira was 3 to one US Dollar. Now almost 7 Lira to a $ and Turkey has progressed phenomenally?
I think devaluation of Rs or free float can actually add to economy if govt plays sensibly----
--Reduce imports which has already been done and speaking up
--Broaden the tax base.
--bring Agri income under tax net
--Offshore oil is conformed as Exxon is not stupid drilling extremely expensive hole down to 3 km.
--This drilling very deep and very rare in the world, especially in offshores.
--Imran must put oil/gas experts to negotiate deals. If the GV is handles expertly, we can strike out IMF in one year. Exxon will play as they are playing in the most African offshore oil. Those countries are ending up nothing as foreign oil companies are taking all by showing gigantic sums in spare parts and making bad JV deals with the base countries. I am sure our monkeys will be bribed by Pakistan enemies and will sabotage the JV agreement clauses. They have done in NLG with Qatar and with power companies.
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Abdul Qayyum Sb.
What about masses who's 100% investment is in PKR. We will lose major chunk of our money overnight.
Dollar devaluation is not good for anyone, especially when we already moved dollar from 105 to 145. Pakistan is not Turkey where population is only 79 million. We are 225 million people and such massive inflation will create economic chaos followed by a social chaos.
If only 1 crore people come out on streets, even Army will not be able to handle such public outrage. Therefore, I still have hope that Imran Khan and Army will resist any further devaluation of PKR.
Inshallah dollar is not going anywhere except small satta-bazi from money changers. Once IMF board approves the package more money will start to flow from China and others to bring back stability.
All depends on how much PAK strengthen its economy. The more the economic strength PKR will strengthen, and vice-versa (time for managed and artificial progress is long over). As with IMF deal, specific words and clauses have been agreed upon such as:
1. "market-determined exchange rate" i.e., not managed one
2. "State Bank of Pakistan’s operational independence and mandate" i.e., no explicit intervention by centre in Forex rates etc.
Best and natural way out is genuine economic growth and increased exports that will stabilize and strengthen the PKR, no other factor. PKR devaluation can be best neutralized with growing exports!
Due to CPEC, Imports will increase as Pakistan would be a Chinese colony. Also due to cheap chinese products, local production and exports would decrease significantly.
On the other hand Chinese are taking over full control of Africa & Kenya Golden port "Mombasa" due to non payment of loans. Same can happen with Pakistan in coming years...
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As per the man who read the IMF draft, It will be a "managed flexible rate". It is not a free-float at all.
secondly, Pakistan has many other ways to control dollar rate beside state bank.
- China bank can intervene
- Private Pakistani banks can intervene time to time
- Defense strategic reserves of Gold can be cashed
- Money Changers can be heavily regulated and FIA will keep them on tight leash. etc. etc.
On the other hand if other conditions are fulfilled, dollar rate waivers will still be possible depending how we use our geo-political cards.
Dollar is not going anywhere. It will be suicide for Pakistan to free-float this thing.
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Fahad Azhar,
Chinese imports will not hurt much as China is allowing currency swap for this trade.
As far Gawadar, during 50's PM of Pakistan Feroz Khan noon purchased it from Oman for $3 million. If China saves our economy and help us stand on our two feet today, I don't mind if they get to keep control of Gawadar Port.
I say don't worry, Dollar is not going anywhere. IK and Army will save this economy togather. Inshallah.
Financial Times
Pakistan and IMF negotiators reach $6bn loan deal
https://www.ft.com/content/8b666bcc-74d5-11e9-bbad-7c18c0ea0201
'The IMF’s announcement appeared to suggest Pakistan had conceded to the demand.'
“A --market-determined exchange rate-- will help the functioning of the financial sector and contribute to a better resource allocation in the economy. The authorities are committed to strengthening the --State Bank of Pakistan’s operational independence and mandate--,” the IMF’s announcement said."
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1. "market-determined exchange rate"
2. "State Bank of Pakistan’s operational independence and mandate"
JDM Sahib, currently we have 10 billions $ imbalanced business with Octupus..... I am going with Fahad sahib......
What is the role of army to save economy? They are trained to fight at border.... how might they be economists? I believe it is the job of a political institution only.......
Inshaa Allah. IK dont have any personal gains and motives but army operate on any another level.
If chinese imports get increased, Every sector of Pakistan economy will get a massive hit. As local production of almost every sector will be stopped as no one will buy Pakistan products due to cheap chinese products.
JDM Sb.
I always read your learned analysis, along with other respectable Zameen contributors, on every thing.
I believe like most other do, the more papulation actually create self-sustained economy at some point of time IF handled by a wise and competent govt!
We used to have top calls minds in every facet of govt business but unfortunately now everywhere we have been put up with empty headed “chache & mamain”.
Imran is honest but people around him lack the required intellect to cash the Pakistan’s location on the world map. Rather than being fortunate, we are now unfortunate being sandwiched among the super powers and being toyed on our greed bound wrong decisions for the last so many decades!
The people who are picked for key posts, do not have any stakes in Pakistan. N & Z did not bother at all to put right person on right place!
One of IMF clause is: Pakistan has to present a written paper that the foreign reserves which are parked with SB, must not be taken out. We know they are parked for only one year time?
Your good wishes for our beloved country are admirable but we have very serious situation for survival.
On currency devaluation, you are right but if Imran put heavy hand on the big tax evaders and some other obvious steps with bravery, I am positive that devaluation can be kept under control.
This tax amnesty is nothing but another plea bargain of NAB.
Allah Karam Farmaie..Aameen
Things seem written on the wall, sir:
اب خیر مانگو آشیاں کی
نیت بدلی ہوئ ہے آسماں کی
Unfortunately happening again:
Dollar records hefty gains against rupee in open market
https://www.dawn.com/news/1482194/dollar-records-hefty-gains-against-rupee-in-open-market
US dollar reaches all time high of Rs146.25 in Pakistan
https://www.dawn.com/news/1482194/dollar-records-hefty-gains-against-rupee-in-open-market
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Shared the same view 161 days ago, on the very same thread:
"Prediction in 1 year is approx 164 PKR/USD..."
At that time, some dears made a mockery out of that claiming:
"It is laughable and shockable and poor MATHEMATICAL CALCULATIONS to suggest pakies to keep $ with the hope to earn with it..... We need to learn maths please...... "
"Forex companies are not able to sale any dollars even there is plenty of supply in reach.
If anyone has any dollars, now is the time to cash them. After signing of IMF deal exchange companies are planning to drag the rate down by at least 10-15 Rupees."
Optimism is good but our government has to take solid step rathar than playing around. I fully support Ik but the truth is current situation looks way over his head. He is putting pressure on current tax payers but giving non tax payers a free pass. Massive business is done in Raja bazar , Anarkali markets. But they dont give taxes because they have unions..
As a nation we always start from the wrong foot... Chinese fool us that they are friends but they dont have Pakistan friendly trade rules. I export miswak to a toothpaste company in China and sending funds to Pakistan is always a problem...
Here is the screenshot link of my chat :
https://ibb.co/h9HHttH
In Foreign Relations its No Enemy, No Friend Theory. It's Simply, Mutual Interests or Conflicts!!
Rich kid has no problem finding new buddies to bend over for him, same goes with thriving economies.
2 weeks ago two professors who are working on vision 2025 came to me from Arid agriculture university faisalabad. They told me that they are doing extensive reasearch to increase exports from last one month and they have met farmers and Chinese is producing 3 ton carrots in 1 acre and pakistanis are doing half ton in 1 acre. We have to use better methods in farming etc... and we need farming evolution...
I told them the problem is not the production. They have wasted there time and government funds.
We get half ton from one acre and we dont even export 10kg of carrots...
The problem is bad handling and tough procedure.
Because everytime we export vegetables, at port ANF checking is way strict. They take out whole container out for full day and check very badly by ruining the whole export shipment. Vegetables do have a shelf life and they are exported in referigerated container..
Congratulation to Nation: Oil/Gas discovery from the ultra deep offshore drilling.
Hats off to the government brave decision to go ahead with offshore deep drilling in “Kakrha” reservoir. I am posting here as this is being read by millions of readers and we all pray to Allah that our leaders come out clear from the billions of bribery money, must have been on offer in order to halt/fail/delay/complicate/ the huge production from the ultra deep reservoir or make illicit clauses on the JV between Pakistan and MNCs.
Play raise your hand for pray, do your maximum, spread it as much as you can, so that our decision makers make the deal in the best interest of motherland and avoid the filthy deals, done in the field of power and LNG in the past.
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On IK's order FIA crackdown started against open market money changers. Dollar fell back by 2.25 in open market after hitting record high of 146.25. In inter-bank dollar remained around 141.50 today.
Next crackdown should be on media & TV anchors who purchased millions of dollars from open market and everyday create fake hype on TV channels to raise dollar rate in open market.
PSX responding positively and gained 406 points today.
JDM sb.
We know Imran is the last option. It is just sometime we get influenced by the TV anchors who use their GOD given good intellect to reroute the thinking flow of the populace.
Every day there are new steps being taken by Imran government.
Imran even with middle order talent/team is the only option for Pakistan. Allah Make him successful…Aameen.
Hope that the holy month brings along the much awaited blessings...
Oil, gas reserves found in Sindh
https://www.google.com/amp/s/www.dawn.com/news/amp/1482184
Wish that not the same blunders comitted as those in Balochistan after Gas discovery at Sui, decades ago....
Imtiaz sb
I am in oil field and have some idea that how manipulations done in oil field!
We have huge oil reservoirs in Baluchistan as well near Iran border but we know they will never be get tapped?
Once Mr. ZA Bhutto attempted drilling in past and King of Iran, Raza Shah Pahlvee, himself came in Pakistan by flying one of the several C-130s, arrived with his plane, and gave the gift to Pakistan by telling him : “No drilling” in Baluchistan!
We are still using some of those gifted C130s.
It is like Pakistan “education budget” allocation? If you try to increase, your govt will go astray!
The developed world knows that “illiteracy” is the key instrument to play with poor nations!
I worked in Pakistan in the capacity of highest National post "deputy superintendent" in one of the MNCs and if I disclose matters of the oil game, you will sure jump on your feet, sir?
So its not just government, us as people need to change. I tailor my shalwar kameez suits from bluearea, per suit they charge Rs. 1400. Yesterday they asked me they have changed prices to Rs. 1800 because of the economic situation.. Like really? I had a heated conversation with them but no avail. Us as a nation need to change otherwise no one will be able to save the country.
1 rupee increase in dollar and everyone increases their rates by 100s. Thats how we work, no price control or anything.