Pakistani Economic Stress Watch

Anujan · Post by **Anujan** » 02 Mar 2023 10:01

https://tribune.com.pk/story/2404005/in ... eak-at-315

Inflation hits half-century peak at 31.5%

Inflation in Pakistan skyrocketed to half a century’s highest level of 31.5% -- becoming the 17th most expensive country in the world --after the government massively raised energy and fuel prices coupled with the adverse impacts of currency devaluation and imports at a halt.

Pakistan is now heading towards hyperinflation -- a situation when prices are out of control and in the territory of a 50% surge.

Hopefully boys will continue to play well and hit a century.

Deans · Post by **Deans** » 02 Mar 2023 10:32

Anujan wrote:
Inflation hits half-century peak at 31.5%

Inflation in Pakistan skyrocketed to half a century’s highest level of 31.5% -- becoming the 17th most expensive country in the world --after the government massively raised energy and fuel prices coupled with the adverse impacts of currency devaluation and imports at a halt.
Pakistan is now heading towards hyperinflation -- a situation when prices are out of control and in the territory of a 50% surge.

Rural inflation is 35% The poor are subsidizing rich urbanites. It will get worse in April, since Rupee has devalued, supply is reduced and higher taxes come into effect.

Manish_P · Post by **Manish_P** » 02 Mar 2023 11:04

Baki newspapers now track the multiple rates, even in headlines

Rupee dives 1.73% to Rs 266.11

Bowing to the International Monetary Fund’s (IMF) condition to truly allow market forces to determine the rupee-dollar exchange rate, the Pakistani currency nosedived 1.73% (or Rs 4.61) in one day to a two-week low at Rs 266.11 against the US dollar in the interbank market on Wednesday.

In the open market, the domestic currency plunged 2.56%, or Rs7, to close at Rs 274 against the greenback on Wednesday, the Exchange Companies Association of Pakistan (ECAP) reported.

the rupee depreciated to Rs 285/$ in the black market in Pakistan and Rs 295/$ in Afghanistan, according to ECAP Secretary General Zafar Paracha.

Dilbu · Post by **Dilbu** » 02 Mar 2023 11:25

Pakistan surrenders to another IMF demand

ISLAMABAD: Desperate to revive the loan programme to stabilise the falling economy, Pakistan on Wednesday gave in to the International Monetary Fund’s (IMF) demand of imposing a power surcharge on the consumers in the next fiscal year.

The Pakistani officials are baffled by IMF’s “shifting goalposts” as the country makes hectic efforts to woo the lender which has set new conditions to unlock the $6.5 billion Extended Fund Facility (EFF) signed in 2019.

The cash-strapped country is undertaking key measures to secure a $1 billion tranche from the IMF under the ninth review of the EFF. Measures include raising taxes, and removing blanket subsidies and artificial curbs on the exchange rate.

Succumbing to one more IMF demand, the Economic Coordination Committee (ECC), which met under the chair of Finance Minister Ishaq Dar, has approved the slapping of a power surcharge up to Rs3.82 per unit from March to June 2023.

The power surcharge of Rs2.63 per unit on average will continue to be charged from power consumers in the next fiscal year 2023-24 in order to implement another tough condition imposed by the IMF for reviving the stalled IMF program.

This power surcharge will also be applicable on power consumers of K-Electric.

vimal · Post by **vimal** » 02 Mar 2023 11:32

Dilbu wrote:Pakistan surrenders to another IMF demand
ISLAMABAD: Desperate to revive the loan programme to stabilise the falling economy, Pakistan on Wednesday gave in to the International Monetary Fund’s (IMF) demand of imposing a power surcharge on the consumers in the next fiscal year.

The Pakistani officials are baffled by IMF’s “shifting goalposts” as the country makes hectic efforts to woo the lender which has set new conditions to unlock the $6.5 billion Extended Fund Facility (EFF) signed in 2019.

This is a shame for a tru islami atami mulk.
Where is the josh to eat grass and make bum?

Mollick.R · Post by **Mollick.R** » 02 Mar 2023 11:42

Cash-strapped Pakistan suffers a downgrade in debt rating from Moody's

MONEYCONTROL NEWS MARCH 01, 2023 / 06:17 AM IST

Moody's Investors Service said it has downgraded the Pakistan government's local and foreign currency issuer and senior unsecured debt ratings to 'Caa3' from Caa1.

The decision to downgrade the ratings is driven by Moody's assessment that Pakistan's "increasingly fragile liquidity" and external position significantly "raises default risks" to a level consistent with a Caa3 rating, the ratings agency said in a release.

Moody's added that it has also downgraded the rating for the senior unsecured MTN programme to (P)Caa3 from (P)Caa1.

The agency further noted that it has changed the country's outlook to "stable from negative".

Pakistan's foreign exchange reserves have fallen to "extremely low levels", far lower than necessary to cover its imports needs and external debt obligations over the immediate and medium term, Moody's.

Read Full Report from Here...

https://www.moneycontrol.com/news/busin ... 76221.html

Manish_P · Post by **Manish_P** » 02 Mar 2023 12:35

Bring out the pop-corn and pakodas folks, paki rupiah on way to break records

Yawn - Rupee tumbles by nearly Rs 19 against dollar in interbank amid IMF delays

The Pakistani rupee sank sharply by Rs18.74 against the dollar in the interbank market on Thursday, with the local currency trading at a historic high of Rs 284.85 in morning trade, according to data shared by the Exchange Companies Association of Pakistan (Ecap).

Analysts attributed the record drop — which is 7.04pc — to the government’s impasse with the International Monetary Fund (IMF).

On Wednesday, the PKR closed Rs 266.11 per dollar, according to SBP data.

chetak · Post by **chetak** » 02 Mar 2023 12:55

Mollick.R wrote:Cash-strapped Pakistan suffers a downgrade in debt rating from Moody's

MONEYCONTROL NEWS MARCH 01, 2023 / 06:17 AM IST

Moody's Investors Service said it has downgraded the Pakistan government's local and foreign currency issuer and senior unsecured debt ratings to 'Caa3' from Caa1.

The decision to downgrade the ratings is driven by Moody's assessment that Pakistan's "increasingly fragile liquidity" and external position significantly "raises default risks" to a level consistent with a Caa3 rating, the ratings agency said in a release.

Moody's added that it has also downgraded the rating for the senior unsecured MTN programme to (P)Caa3 from (P)Caa1.

The agency further noted that it has changed the country's outlook to "stable from negative".

Pakistan's foreign exchange reserves have fallen to "extremely low levels", far lower than necessary to cover its imports needs and external debt obligations over the immediate and medium term, Moody's.

Read Full Report from Here...

https://www.moneycontrol.com/news/busin ... 76221.html

more realistically,

Moody's Investors Service assessment: it should have changed the paki status from "rotting to compost"

and further, it should have also changed the paki country's outlook to "down the tubes from negative"

Dilbu · Post by **Dilbu** » 02 Mar 2023 13:00

How is 'stable' worse than 'negative'? Shouldn't it be the other way around?

Manish_P · Post by **Manish_P** » 02 Mar 2023 13:35

Dilbu wrote:How is 'stable' worse than 'negative'? Shouldn't it be the other way around?

Dilbu ji, it has moved from CAA1 Negative down to CAA3 Stable

Dilbu · Post by **Dilbu** » 02 Mar 2023 13:44

Ah thanks. Boyz should then play well and reach C soon.

Moody's assigns bond credit ratings of Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C, as well as WR and NR for 'withdrawn' and 'not rated' respectively.

Manish_P · Post by **Manish_P** » 02 Mar 2023 13:54

Dilbu Ji, I know you are busy on the elections thread.... but humble request to also visit this thread once a day

Boiz are also playing very well on the other pitch ... interbank rate is was Rs 285 an hour ago...

Neela · Post by **Neela** » 02 Mar 2023 14:00

Manish_P wrote:Dilbu Ji, I know you are busy on the elections thread.... but humble request to also visit this thread once a day

Boiz are also playing very well on the other pitch ... interbank rate is was Rs 285 an hour ago...

I’d suggest a thread party if Pak scores 300
We’re inviting everyone from other threads and celebrating the historic milestone

yensoy · Post by **yensoy** » 02 Mar 2023 14:07

Neela wrote:I’d suggest a thread party if Pak scores 300
We’re inviting everyone from other threads and celebrating the historic milestone

But which rate sir?

Kabul would have already crossed 300. Generally interbank, open market, black market and Kabul rates are around 5-10 rupees apart. Interbank is 285, Open Market is around 290, Black will be 300 and Kabul 310. I say we wait till Open Market crosses 300 to give people time to buy beer. I think authorities will forcibly maintain Interbank below 300 (but no forex will be available) so I wouldn't wait for Interbank.

Dilbu · Post by **Dilbu** » 02 Mar 2023 14:26

I have given up tracking USD rates mainly because of this confusion. May be we should declare Kabul rate as the official rate for this thrad.

Deans · Post by **Deans** » 02 Mar 2023 19:23

Dilbu wrote:I have given up tracking USD rates mainly because of this confusion. May be we should declare Kabul rate as the official rate for this thrad.

Interbank - Irrelevant for this discussion (rate at which Central bank accesses forex from other banks)
Open market - Rate at which Abdul can officially buy forex, provided bank has any to sell to him.
Black market - Where Abdul actually buys forex from. Kabul is now being quoted, because the usual black market guy also does not have forex and
charges a premium to get it from Kabul. If this rate is mentioned by bankers, it is a conservative guess, you are unlikely to get forex below this.

Manish_P · Post by **Manish_P** » 02 Mar 2023 19:32

^ Which is the rate at which bakistan gets external loans? I mean if say country X gives 1 Billion USD to bakistan then what is it's PKR value in the central bank of pakistan?

bharathp · Post by **bharathp** » 02 Mar 2023 19:45

Think tsp should declare the yuan as the official currency. No more info bailouts required and no more tracking pkr rate. Will be a masterstroke. If the west wants tsp to not go to China orbit, the west needs to pay. Tsp lost $100b by being generous.

Deans · Post by **Deans** » 03 Mar 2023 08:24

Dilbu wrote:How is 'stable' worse than 'negative'? Shouldn't it be the other way around?

Stable or negative is a view on where they expect the rating to be in future.
CAA3 means `default imminent with little hope of recovery'.

There is unlikely to be anything worse than this, so there's no negative outlook, IMF is staying they expect this rating to be there for some time
(stable).

Deans · Post by **Deans** » 03 Mar 2023 08:28

Manish_P wrote:^ Which is the rate at which bakistan gets external loans? I mean if say country X gives 1 Billion USD to bakistan then what is it's PKR value in the central bank of pakistan?

Interbank rate. Central Bank will give those $ to banks that need them (or vice-versa) at the Inter-bank rate.

Manish_P · Post by **Manish_P** » 03 Mar 2023 08:36

^ I thought so. With a steadily dropping PKR the pakis are just digging the hole faster and faster.

Neela · Post by **Neela** » 03 Mar 2023 09:07

https://www.dawn.com/news/1739898
Merchandise exports shrink 19pc in February
It"ll be tougher for Pak textiles to compete when electricity tariffs increase per IMF diktat, machinery import is not allowed and repairs will not be possible.
So the biggest earner of forex in Pak is now in deep deep trouble.

https://www.geo.tv/latest/473834-gold-r ... stan-today
Gold rate sees massive increase in Pakistan
So PKR will have a very long innings at the crease as demand for gold jumps - showing lack of trust . Kabul rate or bank rates ...it soon would not matter I hope.

https:/xxx.ft.com/content/be5cad44-89fe-438a-bdf7-42f1d35977fa
Pakistan raises interest rates to 20%, the highest in Asia

“Pakistan’s economy is heading towards a very dangerous future. Our already sluggish growth will fall further. The new interest rate will make it impossible for many businesses to afford borrowings and still make money,” said Ihtisham ul Haque, a commentator on the Pakistan economy. “The situation has become very grim.”

VishnuS · Post by **VishnuS** » 03 Mar 2023 10:24

Manish_P wrote:^ Which is the rate at which bakistan gets external loans? I mean if say country X gives 1 Billion USD to bakistan then what is it's PKR value in the central bank of pakistan?

A few days ago China gave $700M @ 10% interest. This was before Moody downgraded Pak to Caa3.

However, S&P had already downgraded Pak to Caa- (equivalent to Moody's Caa3 standard) a month ago.

vimal · Post by **vimal** » 03 Mar 2023 10:30

Neela wrote:

https:/xxx.ft.com/content/be5cad44-89fe-438a-bdf7-42f1d35977fa
Pakistan raises interest rates to 20%, the highest in Asia

Look you kuffars, Pakistan is a leader in Asia and soon the entire world.

Aditya_V · Post by **Aditya_V** » 03 Mar 2023 11:57

Err question to Maulanas, if Interest is Haram why is interest that too highest interest being paid in the fortress of Islam?

Deans · Post by **Deans** » 03 Mar 2023 12:14

VishnuS wrote:
Manish_P wrote:^ Which is the rate at which bakistan gets external loans? I mean if say country X gives 1 Billion USD to bakistan then what is it's PKR value in the central bank of pakistan?
A few days ago China gave $700M @ 10% interest. This was before Moody downgraded Pak to Caa3.

However, S&P had already downgraded Pak to Caa- (equivalent to Moody's Caa3 standard) a month ago.

Fitch has also downgraded Pak to the same extent.
Moody downgraded from CAA1 to 3, bypassing CAA2, which is rare.

China's 10% interest is in US$. In International banking its a `Pathan' rate of interest.

Dilbu · Post by **Dilbu** » 03 Mar 2023 20:09

Moody's downgrades five Pakistani banks

Moody’s Investors Service on Friday downgraded the long-term deposit ratings of five Pakistani banks to Caa3 from Caa1. The banks are Allied Bank Limited (ABL), Habib Bank Limited (HBL), MCB Bank Limited (MCB), National Bank of Pakistan (NBP) and United Bank Limited (UBL).

Moreover, Moody’s also downgraded the five banks’ long-term foreign currency Counterparty Risk Ratings (CRRs) to Caa3 from Caa1.

As part of the same rating action, Moody’s lowered the five banks’ Baseline Credit Assessments (BCAs) to Caa3 from Caa1, and as a result also downgraded their local currency long-term CRRs to Caa2 from B3 and their long-term Counterparty Risk Assessments to Caa2(cr) from B3(cr).

However, the outlook on all banks’ long-term bank deposit ratings has been changed to stable from negative, said the rating agency in a statement.

Dilbu · Post by **Dilbu** » 03 Mar 2023 20:12

Duplicate deleted

Dilbu · Post by **Dilbu** » 03 Mar 2023 20:12

Miftah calls Dar's exchange rate policy 'a joke with the economy'

Former finance minister Miftah Ismail on Thursday slammed the policy of artificially managing the dollar rate, saying that it was "not a serious economic policy but a joke with the economy".

While commenting on the rupee’s sharp downfall on a Geo News programme, Ismail said that it was a bad day for Pakistan’s economy that the dollar had reached close to Rs300 and the interest rate had touched 20% after a massive 3% hike.

While indirectly criticising his successor Ishaq Dar, the Pakistan Muslim League-Nawaz (PML-N) leader lamented that holding the dollar artificially at 240 was not needed especially at a time when the government did not have funds.

“When you leave the dollar to the free market on the IMF’s condition, it jumps from 230 to 260. Then you decrease the price of petrol and in two days it [dollar] rises again by Rs30. This is not a serious economic policy but a joke with the economy,” said the former finance minister.

Dilbu · Post by **Dilbu** » 03 Mar 2023 20:14

Consumers brace for flour shortage

KARACHI: Already struggling to survive under unprecedented food inflation, Sindh millers on Thursday multiplied consumers’ plight by further increasing the flour prices as well as suspending supplies.

Pakistan Flour Mills Association Sindh Zone Chairman Amir Abdullah explaining the reasons for this extreme step told a press conference that the Sindh Food Department had been supplying poor quality wheat in insufficient quantities and forcing millers to provide flour at low rates to the consumers.

He said the food department was also using other pressure tactics and sealing mills in Karachi and interior Sindh on alleged hoarding charges.

yensoy · Post by **yensoy** » 03 Mar 2023 23:01

Dilbu wrote:Miftah calls Dar's exchange rate policy 'a joke with the economy'
Former finance minister Miftah Ismail on Thursday slammed the policy of artificially managing the dollar rate, saying that it was "not a serious economic policy but a joke with the economy".
...This is not a serious economic policy but a joke with the economy,” said the former finance minister.[/b]

It's not like he did anything better. All these are jokers, nobody wants to touch the following live wires which are all needed to fix this hellhole:
1. Deradicalize the population, stop terrorism
2. Demilitarize the country, seek peace
3. Denuclearize, get big benefits
4. Enact land reforms, redistribute land
5. Control population
6. Bring women into workforce
7. Regularize the economy, effectively enforce tax collection
8. Encourage saving, discourage or tax profligate spending
and only then
9,10.... educate your population, provide healthcare, provide pensions and welfare...

Which one of points 1-8 did he touch or even influence when he had power, hainji?

partha · Post by **partha** » 03 Mar 2023 23:08

^

6. Bring women into workforce

It will be a long long way before this happens. It may never happen. Just to give you an idea, I remember reading an article in DAWN in 2014 in the run up to Indian elections where a Pakistani journalist visited a few Indian cities and seeing women driving two wheelers alone was one of the major highlights (for him) in his report.

Atmavik · Post by **Atmavik** » 03 Mar 2023 23:45

Pakistan needs to first accept that they are the “ Conqured and not the Conquerers”

partha · Post by **partha** » 03 Mar 2023 23:49

https://www.thenews.com.pk/latest/10461 ... -conferene

Dar reveals China has renewed a facility under which Pakistan will receive an additional inflow of $500m in “next few days”

We returned $1.3 billion to it and this facility has been renewed and we will receive the amount back in three tranches. “We paid back $1.3 billion in three tranches — $500 million, $500 million and $300 million. We will receive it back the same way.

Bart S · Post by **Bart S** » 03 Mar 2023 23:56

Cash-strapped Pakistan suffers a downgrade in debt rating from Moody's

Moody shud rejine

Bart S · Post by **Bart S** » 04 Mar 2023 00:05

Atmavik wrote:Pakistan needs to first accept that they are the “ Conqured and not the Conquerers”

Some occasional voices are realizing it and speaking out (example of Javed Chaudhry in the video below), but most of the population remains delusional and is kept that way by the feudal elites.
https://twitter.com/arifaajakia/status/ ... 72000?s=20

Anujan · Post by **Anujan** » 04 Mar 2023 01:07

Chinese loan is part of the Inshallah financing.

We will get loans from China inshallah
We will get loans from Saudis inshallah
UAE will agree to buy gas terminals inshallah

If they are getting loans from Chinese commercial banks (rate is likely to be greater than 5%. Massa treasuries yield 5% now) it means that Pakistan does not have money to pay back other inflexible creditors.

Neela · Post by **Neela** » 04 Mar 2023 11:38

@annamalai_k
To tide over the economic crisis the island country faced, our Hon PM extended a financial assistance of over 3.8 Billion dollars, including credit lines, a currency swap arrangement and sent a warship carrying essential drugs for the Sri Lankan people. (13/14)

Indian aid to SL in 2022.
SL is much smaller vs Pak.

Just to put things in perspective

williams · Post by **williams** » 04 Mar 2023 12:30

Anujan wrote:Chinese loan is part of the Inshallah financing.

We will get loans from China inshallah
We will get loans from Saudis inshallah
UAE will agree to buy gas terminals inshallah

If they are getting loans from Chinese commercial banks (rate is likely to be greater than 5%. Massa treasuries yield 5% now) it means that Pakistan does not have money to pay back other inflexible creditors.

These Baki beggers are even salivating that India will bail them out. Look at our own Bajpai ji annalizing

https://thediplomat.com/2023/02/for-now ... -pakistan/

partha · Post by **partha** » 05 Mar 2023 00:00

partha wrote:
Anujan wrote:
Pakistan should take that money and throw it in China's face and ask them to stop oppressing Uyghurs first!

Just kidding. All dollars are totally okay now.
It's a slap on the face of IMF though. As the daring former NSA told US "Pakistan has options". Finally IMF will be forced to accept Pakistan's demands and provide funds on Pakistan's terms. Saudi officials will complete the study to invest $10 billion in Pakistan anytime now and then who needs IMF.