Pakistani Economic Stress Watch

The Strategic Issues & International Relations Forum is a venue to discuss issues pertaining to India's security environment, her strategic outlook on global affairs and as well as the effect of international relations in the Indian Subcontinent. We request members to kindly stay within the mandate of this forum and keep their exchanges of views, on a civilised level, however vehemently any disagreement may be felt. All feedback regarding forum usage may be sent to the moderators using the Feedback Form or by clicking the Report Post Icon in any objectionable post for proper action. Please note that the views expressed by the Members and Moderators on these discussion boards are that of the individuals only and do not reflect the official policy or view of the Bharat-Rakshak.com Website. Copyright Violation is strictly prohibited and may result in revocation of your posting rights - please read the FAQ for full details. Users must also abide by the Forum Guidelines at all times.
Dilbu
BRF Oldie
Posts: 8271
Joined: 07 Nov 2007 22:53
Location: Deep in the badlands of BRFATA

Re: Pakistani Economic Stress Watch

Post by Dilbu »

Six followed by a quick double. Baays are playing well.
Rupee shatters all previous records, falls to new low of 224 against dollar
The local currency fell by Rs8.80 in the interbank market after yesterday's close of Rs215.20 Tresmark data showed. The rupee was also trading in the open market at Rs224 against the dollar today.
Manish_P
BRF Oldie
Posts: 5413
Joined: 25 Mar 2010 17:34

Re: Pakistani Economic Stress Watch

Post by Manish_P »

As suggested by many knowledgeable maulaners here, to save enchandee of Bakistan, Bajwa must immediately order creation of a new currency for eg say the 'Djinnahr'.

Make the Djinnahr tied on perpetual 1:1 parity basis with the Dollar and free floating against the baki rupiah.

So 1 Djinnahr will always be equal to 1 USD, even while the PKR falls to 230 , 250, 786 ...


PS: reason humbly proposed the name 'Djinnahr' is because it comprises many terms important to bakistan

Dinar - currency of four father
jinnah - bakistani father of nation
jinns - baki saviours as per laal topi
din - arabic word for islamic way (english alternate meaning 'loud noise' is also apt for bakistan)
jar - as in jarring impacts bakistan faces every now and then
Aditya_V
BRF Oldie
Posts: 14332
Joined: 05 Apr 2006 16:25

Re: Pakistani Economic Stress Watch

Post by Aditya_V »

Previously we have had small paise movements, here there 3 new records, 221, 222 and 224 posts in 1 day- good going. Another point if the Pakis really had 160 nukes, would they either have 1) Sold some to Iran and Got USD25-30 Billion or 2) By the mere threat US via IMF and UAE, Saudis would have given them 25-30 Billion.

AQ Khan and Paki Army sold their diagrams to both Iran and Libya but the drawings were useless and did not help either country in developing Nukes.

So wither US or China has soo much control over Paki Nukes that the rest of the world is not worried or Pakis are Nuke nude.
g.sarkar
BRF Oldie
Posts: 4382
Joined: 09 Jul 2005 12:22
Location: MERCED, California

Re: Pakistani Economic Stress Watch

Post by g.sarkar »

https://www.bloomberg.com/news/articles ... ts-outlook
Pakistan Rupee Drops to Record, Bonds Fall as Fitch Cuts Outlook
Currency declines as much as 3.2% to 221.99 a dollar
Fitch lowers outlook to negative, citing financing risks
Karl Lester M Yap and Faseeh Mangi, July 19, 2022

Pakistan’s rupee slumped to a fresh record low and the nation’s stocks and dollar-denominated bonds both fell after Fitch Ratings cut the country’s credit-rating outlook.
The rupee slid 3.2% to close at 221.99 per dollar, while the benchmark stock index slid 2.4%, and dollar bonds due in April 2024 were indicated 14.2 cents lower at 53.15 per dollar.
......
Gautam
Free fall to triple century? Is this a reaction to Dimran Khan Niazi' election wins? Is the plot going to thicken?
Dilbuji, please wish that Pak rupee does not fall any further, BRF needs you.
Thakur_B
BRF Oldie
Posts: 2404
Joined: 11 Aug 2016 06:14

Re: Pakistani Economic Stress Watch

Post by Thakur_B »

Antrix wrote:Just a few weeks back, we were waiting with bated breath for PKR to hit double century, now when do we start the countdown to triple century Sehwag style?
PKR needs to bat with persistence of Dravid and strike rate of Afridi.
partha
BRF Oldie
Posts: 4483
Joined: 02 Jul 2010 15:25

Re: Pakistani Economic Stress Watch

Post by partha »

Dollar collapsing so fast means IMF deal is still not guaranteed. So much for "staff level agreement".
Ambar
BRF Oldie
Posts: 3173
Joined: 12 Jun 2010 09:56
Location: Weak meek unkil Sam!

Re: Pakistani Economic Stress Watch

Post by Ambar »

There were rumors more than a month ago that Pakistan has agreed to devaluate the currency to Rs 230/USD as a part of the IMF deal, who knows maybe this is as per the plan. Although i don't know what will stop it from further sliding to Rs 250 or even Rs 300. They are now trapped in a vicious cycle of debt to repay debt, there is no way out other than default.
RCase
BRF Oldie
Posts: 2249
Joined: 02 Sep 2011 22:50
Location: Awaiting the sabbath of Fry djinns

Re: Pakistani Economic Stress Watch

Post by RCase »

Manish_P wrote:As suggested by many knowledgeable maulaners here, to save enchandee of Bakistan, Bajwa must immediately order creation of a new currency for eg say the 'Djinnahr'.

Make the Djinnahr tied on perpetual 1:1 parity basis with the Dollar and free floating against the baki rupiah.

So 1 Djinnahr will always be equal to 1 USD, even while the PKR falls to 230 , 250, 786 ...


PS: reason humbly proposed the name 'Djinnahr' is because it comprises many terms important to bakistan

Dinar - currency of four father
jinnah - bakistani father of nation
jinns - baki saviours as per laal topi
din - arabic word for islamic way (english alternate meaning 'loud noise' is also apt for bakistan)
jar - as in jarring impacts bakistan faces every now and then
Sirji - would like to add the following:
h(a)r - downhill skiing, 93,000 surrender, Kargil etc.
na h(a)r - Bakistan claims of winning all wars
RCase
BRF Oldie
Posts: 2249
Joined: 02 Sep 2011 22:50
Location: Awaiting the sabbath of Fry djinns

Re: Pakistani Economic Stress Watch

Post by RCase »

Dilbu wrote:These are desperate measures and things are not very far from Sri Lanka's situation.
For a similar financial situation, the reactions will be different.
Bakis are TFTA and will not behave in cowardly fashion like Lankan SDREs. This is gustaki of the inheritors of the Mughals ruling for the last 1000 (sic) years! Nothing less than AK Phyr, lamp post and burning buses and buildings will do for the faux Mughals.
jash_p
BRFite
Posts: 374
Joined: 03 Feb 2008 05:56

Re: Pakistani Economic Stress Watch

Post by jash_p »

There is rumor in Islamabad that all exporters are refusing to accept LC and asking full CASH for good or services before delivery. Pharma are crying as they are not getting materials on credit and there will be shortage of medicine.
Manish_P
BRF Oldie
Posts: 5413
Joined: 25 Mar 2010 17:34

Re: Pakistani Economic Stress Watch

Post by Manish_P »

RCase wrote:
Manish_P wrote:...

PS: reason humbly proposed the name 'Djinnahr' is because it comprises many terms important to bakistan

Dinar - currency of four father
jinnah - bakistani father of nation
jinns - baki saviours as per laal topi
din - arabic word for islamic way (english alternate meaning 'loud noise' is also apt for bakistan)
jar - as in jarring impacts bakistan faces every now and then
Sirji - would like to add the following:
h(a)r - downhill skiing, 93,000 surrender, Kargil etc.
na h(a)r - Bakistan claims of winning all wars
RCase ji, more the better :lol:

Perhaps also add 'Nah'... the word the baki beggars are hearing more and more nowadays from their aid donor 'friends'

Then of course seeing that urdu script is written from right to left, we can also add 'Han' ... for respected tallel ilon blothel

So many possibilities....
Manish_P
BRF Oldie
Posts: 5413
Joined: 25 Mar 2010 17:34

Re: Pakistani Economic Stress Watch

Post by Manish_P »

More jolts for the awaam...who were subsidized by the four fathers for decades

Yawn - Nepra gets nod for Rs 11 per unit hike
The government has asked the National Electric Power Regulatory Authority (Nepra) to allow increasing electricity rates by up to Rs 11 per unit for high-end residential consumers across the country to bear the additional burden of consumers with lower consumption.

The rate approved by the federal government under the “tariff rebasing 2022-23” for consumers with a monthly consumption slab of 101-200 units and above is significantly higher than the Rs 7.91 per unit increase in the uniform national average determined by the regulator a few weeks ago.

Under the government directive, the base tariff for those consuming 101-200 would be increased by Rs 7.21 per unit in phases to Rs 18.95, while the rate for 201-300 per month would go up by Rs 8.31 to Rs 22.14 per unit. The rate for 301-400 units would increase by Rs 4.30 per unit to Rs 25.53, while the rate for 401-500 units would increase by Rs 6.51 per unit to Rs 27.74.
Anujan
Forum Moderator
Posts: 7807
Joined: 27 May 2007 03:55

Re: Pakistani Economic Stress Watch

Post by Anujan »

Bond prices for Pakistan's dollar denominated bond maturing Apr 2024, yielding 8.5% a year. If you invested $1 in it, it is currently worth 54 cents. Markets are pricing a 50% probability of default. Ideally if there is no probability of default, it would sell at $1.085 it yields 8.5%


Image


If you gave Pakistan $1 in 2014, 46 cents of that $1 is down the Pakistan now.

I think Pakistan should default. Isnt moneylending is a sin? Bondholders should be taught a lesson for indulging in sin.
Manish_P
BRF Oldie
Posts: 5413
Joined: 25 Mar 2010 17:34

Re: Pakistani Economic Stress Watch

Post by Manish_P »

Anujan wrote:...
If you gave Pakistan $1 in 2014, 46 cents of that $1 is down the Pakistan now.

I think Pakistan should default. Isnt moneylending is a sin? Bondholders should be taught a lesson for indulging in sin.
Ah, but Anujan ji, when it comes to dealing with Bakistan it is only the money lender who think he is lending, the bakis think they are being given their rightful dues... all shariah compliant onlee
Antrix
BRFite -Trainee
Posts: 43
Joined: 09 Apr 2022 14:24

Re: Pakistani Economic Stress Watch

Post by Antrix »

I think its about time the USA & NATO give Pakistan its rightful due. As we all know Pakistan lost USD 450 Trillion due to the War on Terror. Bakistanis are the true victims of terrorism. Pakistan should demand USD 500 trillion as reparations and another USD 100 trillion for their reputation loss. AoA.
kit
BRF Oldie
Posts: 6278
Joined: 13 Jul 2006 18:16

Re: Pakistani Economic Stress Watch

Post by kit »

Anujan wrote:Bond prices for Pakistan's dollar denominated bond maturing Apr 2024, yielding 8.5% a year. If you invested $1 in it, it is currently worth 54 cents. Markets are pricing a 50% probability of default. Ideally if there is no probability of default, it would sell at $1.085 it yields 8.5%

I think Pakistan should default. Isnt moneylending is a sin? Bondholders should be taught a lesson for indulging in sin.
Indeed , who is talking about paying them back :mrgreen:
Dilbu
BRF Oldie
Posts: 8271
Joined: 07 Nov 2007 22:53
Location: Deep in the badlands of BRFATA

Re: Pakistani Economic Stress Watch

Post by Dilbu »

Dollar continues upward march, trades at Rs226 in interbank market
The US dollar continued its ascent on Wednesday morning against the Pakistani rupee, trading at Rs226 in the interbank market. The new rate was a climb by Rs4.01 from yesterday's close of Rs221.99 to a dollar, a record high.
vijayk
BRF Oldie
Posts: 8785
Joined: 22 Jun 1999 11:31

Re: Pakistani Economic Stress Watch

Post by vijayk »

https://twitter.com/AtifRMian/status/15 ... 4829357056

Pakistan's economy is in deep crisis

a long thread

Do Read
Bart S
BRF Oldie
Posts: 2938
Joined: 15 Aug 2016 00:03

Re: Pakistani Economic Stress Watch

Post by Bart S »

vijayk wrote:https://twitter.com/AtifRMian/status/15 ... 4829357056

Pakistan's economy is in deep crisis

a long thread

Do Read
Yet another Qaidani Saazish against Pak Sarzameen. Pakistanis should ignore and double down on the path that they have taken.
partha
BRF Oldie
Posts: 4483
Joined: 02 Jul 2010 15:25

Re: Pakistani Economic Stress Watch

Post by partha »

https://www.bloomberg.com/news/articles ... o-pakistan
IMF Seeks Assurance on Saudi Funding to Pakistan
The International Monetary Fund is looking to assess Saudi Arabia’s commitment to financing Pakistan before the multilateral lender disburses fresh funds to the South Asian nation, according to people familiar with the matter.

The Washington-based lender wants to ensure that Saudi Arabia will follow through with as much as $4 billion in funding to Pakistan to ensure Islamabad does not have a funding gap after the IMF loan, the people said, asking not to be identified discussing private deliberations. The transfer could include special drawing rights, they added.
Saudi: first get commitment from IMF for funds
IMF: first get commitment from Saudi for funds

Image
g.sarkar
BRF Oldie
Posts: 4382
Joined: 09 Jul 2005 12:22
Location: MERCED, California

Re: Pakistani Economic Stress Watch

Post by g.sarkar »

https://www.reuters.com/markets/rates-b ... 022-07-20/
Pakistan finmin says rupee slide not due to economic fundamentals
Syed Raza Hassan, July 20, 2022

KARACHI, Pakistan (Reuters) - Pakistan's finance minister on Wednesday blamed the rupee's slide on political turmoil, saying he expects market jitters over the currency's sharp decline to subside soon.
The South Asian country recently passed through another bout of political instability, with the government of Prime Minister Shehbaz Sharif taking over from ousted premier Imran Khan in April.
"The rupee downturn is not due to economic fundamentals," Finance Minister Miftah Ismail told Reuters. "The panic is primarily due to political turmoil, which will subside in a few days."
Pakistan is also suffering from fast depleting foreign reserves, a declining currency and widening fiscal and current account deficits, with the rupee losing 18% of its value since Dec. 21.
The rupee fell 2% on Monday and 3% on Tuesday despite last week's staff level agreement reached with the International Monetary Fund that would pave the way for a disbursement of $1.17 billion under resumed payments of a bailout package.
Pakistan is also suffering from fast depleting foreign reserves, a declining currency and widening fiscal and current account deficits, with the rupee losing 18% of its value since Dec. 21.
The rupee fell 2% on Monday and 3% on Tuesday despite last week's staff level agreement reached with the International Monetary Fund that would pave the way for a disbursement of $1.17 billion under resumed payments of a bailout package.
On Wednesday morning, the rupee was trading at 225 per dollar, having ended Tuesday at 221.99 after Fitch ratings agency revised its outlook for Pakistan sovereign debt from stable to negative - though it affirmed Long-Term Foreign-Currency and Issuer Default Rating at "B-".
"There is panic in the market, I fear it (the rupee) will go down further," Zafar Paracha, secretary general of a foreign exchange association, the Exchange Companies of Pakistan, told Reuters.
.....
Gautam
Dilbu
BRF Oldie
Posts: 8271
Joined: 07 Nov 2007 22:53
Location: Deep in the badlands of BRFATA

Re: Pakistani Economic Stress Watch

Post by Dilbu »

60 essential medicines vanish from market
KARACHI: In an alarming situation, around 60 essential medicines, including suicide-prevention drug, have vanished from the market due to increase in their cost of production, prompting psychiatrists to fear for high suicide cases in the country.

“All the brands of Lithium Carbonate are not available in the market for last two to three months. This is the most effective medicine for the treatment of several psychiatric illnesses including bipolar disorder. If this drug is not made available any soon, many people with psychiatric illness may commit suicide”, renowned psychiatrist and former president of Pakistan Psychiatric Society (PPS) told The News.

Similarly, some other essential medicines, including methylphenidate for the treatment of attention deficit hyperactivity disorder (ADHD) in children and clonazepam drops drops and tablets for epilepsy in children and adults, are also not available in the market, physicians and pharmacists said.
Qazi Mansoor Dilawar, the Chairman of Pakistan Pharmaceutical Manufacturers’ Association (PPMA) conceded that several medicines were not available in the local market, as their cost of production had increased to the extent where it was not viable for the manufacturers to produce the drugs and sell them on less price than the cost of production.

“Rupee’s devaluation is the biggest factor behind increasing cost of production of many essential medicines. Cost of raw material is increasing while utilities, transportation and other costs have made it impossible for the pharmaceutical companies to manufacture many essential medicines,” Qazi Mansoor Dilawar said.

He said unless the prices of the medicines are increased 30 to 40 percent by the government or prices of medicines are deregulated, the unavailability of medicines would continue and feared that more companies could stop manufacturing several more medicines in the days to come.
Dilbu
BRF Oldie
Posts: 8271
Joined: 07 Nov 2007 22:53
Location: Deep in the badlands of BRFATA

Re: Pakistani Economic Stress Watch

Post by Dilbu »

Political ‘chaos’, ascendant dollar send rupee tumbling to 227 in interbank
The rupee’s slide against the dollar continued unabated on Thursday, with the local currency falling to a record low of Rs227 in the interbank market, with watchers attributing the losses to political “chaos” and a greenback that is strengthening against other currencies as well.

The rupee had closed at Rs224.92 on Wednesday.

When the session opened today, the local currency depreciated Rs2.08 to 227 against the greenback by 10:57am, according to the Foreign Exchange Association of Pakistan (FAP).
Dilbu
BRF Oldie
Posts: 8271
Joined: 07 Nov 2007 22:53
Location: Deep in the badlands of BRFATA

Re: Pakistani Economic Stress Watch

Post by Dilbu »

Power tariff likely to go up by Rs9.90 per unit
ISLAMABAD (Dunya News) - Central Power Purchasing Agency (CCPA) has sought hike in power tariff by Rs9.90 under the monthly fuel adjustment mechanism for June.

According to National Electric Power Regulatory Authority (NEPRA), it will conduct hearing on CCPA plea for power tariff hike on July 28.

Meanwhile K-Electric has also sought Rs11.38 increase in power tariff under the monthly fuel adjustment for the month of June.
Manish_P
BRF Oldie
Posts: 5413
Joined: 25 Mar 2010 17:34

Re: Pakistani Economic Stress Watch

Post by Manish_P »

Dilbu wrote:..
KARACHI: In an alarming situation, around 60 essential medicines, including suicide-prevention drug, have vanished from the market due to increase in their cost of production, prompting psychiatrists to fear for high suicide cases in the country.

“All the brands of Lithium Carbonate are not available in the market for last two to three months. This is the most effective medicine for the treatment of several psychiatric illnesses including bipolar disorder. If this drug is not made available any soon, many people with psychiatric illness may commit suicide”, renowned psychiatrist and former president of Pakistan Psychiatric Society (PPS) told The News.

...
The uniformed jihadis can use this as a wonderful opportunity to increase recruitment of soosai bombers!
Guddu
BRFite
Posts: 1054
Joined: 01 Dec 2008 06:22

Re: Pakistani Economic Stress Watch

Post by Guddu »

Aditya_V
BRF Oldie
Posts: 14332
Joined: 05 Apr 2006 16:25

Re: Pakistani Economic Stress Watch

Post by Aditya_V »

When the Indian economy was small it was easy to keep Pakis as competitors, now as India keeps growing, its becoming 2 costly to make sure Pakis compete. Actually they are not doing too badly though.
AkshaySG
BRFite
Posts: 412
Joined: 30 Jul 2020 08:51

Re: Pakistani Economic Stress Watch

Post by AkshaySG »

Aditya_V wrote:When the Indian economy was small it was easy to keep Pakis as competitors, now as India keeps growing, its becoming 2 costly to make sure Pakis compete. Actually they are not doing too badly though.
They compete because it is in the interests of US, EU and China to not let the gap become too big between Pak and India... Lest India stop focusing its attention on Pak and start thinking more about its massive role in tbe World Order


The West + China know that these billion dollar loans to Pakistan will basically flow into its army and defense spending and India will have to match or exceed that to keep its strategic advantage
mody
BRFite
Posts: 1362
Joined: 18 Jun 2000 11:31
Location: Mumbai, India

Re: Pakistani Economic Stress Watch

Post by mody »

Excellent article by Lt. Gen P.R. Shankar (Retd). Long article, but a great read.

https://www.msn.com/en-in/news/world/pa ... a6025b06dc
Pakistan: Wolf At The Door


"Coming to pure economics

World Bank has warned Pakistan of macroeconomic instability. The report also stated that Pakistan’s real GDP per capita growth has been only around 2%. Domestic and foreign investment levels are dismally low. Productivity has stagnated. Agriculture, which is 20 % of Pakistan’s GDP, is contracting. From a food surplus nation Pakistan has become a net food importer. It imports wheat, sugar, 70% of its pulses and 86%of its edible oil. Its domestic wheat yield has dropped due to shrinking acreage, poor application of fertiliser, water scarcity, and limited certified seeds and so on. As per estimates the country will import millions of tonnes of grain in perpetuity. That, Pakistan usually imports wheat from Russia and Ukraine tells its own story. The country is already water scarce. A combination of population growth, inadequate storage capacity, poor water management and, polluted ground water will drive Pakistan into absolute water scarcity very shortly. At that time, Pakistan will become a fully food insecure state. As it stands 90 million people are already going hungry. 40% of Pakistan’s population is food-insecure.

Pakistan’s population of 220 million growing uncontrolled at 2.4% cannot be sustained by the land. It can also not harness its youth bulge of 63% with the current quality of ideologically driven education, lack of industry, shrivelling agriculture, collapsing economy and poor governance. As per the National Interest article, the price spike in oil prices has hit Pakistan hard, driving up the cost of its imports by more than 85 percent. Its trade deficit as on 30 Jun 2022 is nearly $50 billion, a 57% increase in one year. Inflation in Jun was topping 20%. Its forex reserves hover between 6-9 bn USD. If the IMF program gets derailed, this situation will worsen faster. The CPEC instead of being an asset is an economic liability. It was supposed to solve Pakistan’s chronic electricity problem. However urban areas experience six to ten hours and, rural areas witness eight to sixteen hours of loadshedding. Sovereign counter guarantees to Chinese independent power producers who form the bulk of CPEC are a drain on Pakistani government’s revenue. A camouflagedwolf is already inside and eating up Pakistan.

Two constants which have not changed inPakistan-the ever increasing defence expenditure and skimming the top by the elites. The defence expenditure has a hefty sum of ballooning import content disproportionate to its needs. In addition, the salaries and perks of armed forces increase irrespective of the state of the economy. Historically, Pakistan has not been able to afford any of its wars. That did not matter since they were paid by others. As a result it is addicted to be in a continual state of conflict. Hereafter it has to self-finance its conflicts from within its meagre resources. Elite capture is done by bureaucrats and the feudal creamy layers who apportion themselves perks and privileges far in excess of any other comparable country. These two classes live in a different world as compared to the rest of Pakistan and are unaffected by any happening in the Pakistani economy. The Pakistani elite and military live in a state of belief in which their privileged and affluent life is preordained and that the broader society has to permanently bear the burden of their profligacy. These rabid wolves will eat Pakistan in whatever form it is."
Dilbu
BRF Oldie
Posts: 8271
Joined: 07 Nov 2007 22:53
Location: Deep in the badlands of BRFATA

Re: Pakistani Economic Stress Watch

Post by Dilbu »

Ambar
BRF Oldie
Posts: 3173
Joined: 12 Jun 2010 09:56
Location: Weak meek unkil Sam!

Re: Pakistani Economic Stress Watch

Post by Ambar »

KARACHI:
The Pakistani rupee further depreciated on Thursday as the US dollar rose above Rs229.98 in the inter-bank market, setting a new record.

As economic challenges for the country increased, the dollar’s meteoric rise continued as commercial banks reportedly resumed lines of credit for oil imports at high costs.

The fresh high of the USD comes in response to the rising demand for the foreign currency, despite a lack of supply in the interbank market.

Explaining the factors behind the significant depreciation of the rupee, the State Bank of Pakistan (SBP) has stated that the current account situation, under the dynamic market-based exchange rate system, corresponds to news of internal uncertainty. This combination has led to fluctuations in the value of the rupee on a daily basis.

Read Tarin disputes govt’s claim of reaching agreement with IMF

The central bank furthered that the dollar's appreciation is also a result of an aggressive interest rate policy adopted by the United States Federal Reserve to control internal inflation.

Prime Minister Shehbaz Sharif sought an urgent board meeting of the International Monetary Fund (IMF) on Wednesday
to approve Pakistan’s request for a bailout package, as the rupee was beaten for the third day in a row due to high political volatility and a pause in major foreign loans inflows.

Chairing a meeting on the rapidly deteriorating external sector situation, Shehbaz directed Finance Minister Miftah Ismail to request the IMF for approval of Pakistan’s loan before going on recess from next month, at least three meeting participants told The Express Tribune.

The prime minister chaired the meeting shortly after Ismail and a senior official of the SBP held separate meetings with journalists in Islamabad to explain the reasons behind a rapid fall in the value of the rupee and jittery markets.

Read Rupee slides to record low of Rs226 against USD

The country is now ready to sell its two LNG-fired power plants to the United Arab Emirates (UAE) at a negotiated price within a few days by cutting down the competitive privatisation process that takes about one and a half years.

The government is also willing to give a seat to the UAE government on its blue-chip companies for another $1 billion to stop the current economic meltdown :rotfl: – that, too, through a government-to-government deal and promulgating a presidential ordinance.
Anujan
Forum Moderator
Posts: 7807
Joined: 27 May 2007 03:55

Re: Pakistani Economic Stress Watch

Post by Anujan »

If UAE buys the LNG fired plants, it'll be an idiot. Pakistan does not pay power companies.

UAE would have to operate the plants, pay for LNG, pay for power generation and not get paid for generating that power.
Dilbu
BRF Oldie
Posts: 8271
Joined: 07 Nov 2007 22:53
Location: Deep in the badlands of BRFATA

Re: Pakistani Economic Stress Watch

Post by Dilbu »

I think it is the other way around. UAE will take control of the plants including the fuel supply and they will switch off the power supply whenever pakis step out of line. With the ever deteriorating power situation in the country, pakis will not be able to survive without the plants and they will be at their mercy. But hey this is TSP we are talking about and they will always find some or other way to pull the wool over four fathers.
Ambar
BRF Oldie
Posts: 3173
Joined: 12 Jun 2010 09:56
Location: Weak meek unkil Sam!

Re: Pakistani Economic Stress Watch

Post by Ambar »

Question is why arent they offering these LNG power plants to the Chinese ? It is only a matter of time before pakis start offering land/worthless assets to the Iranians for some free gas/oil.
Aditya_V
BRF Oldie
Posts: 14332
Joined: 05 Apr 2006 16:25

Re: Pakistani Economic Stress Watch

Post by Aditya_V »

Ambar wrote:Question is why arent they offering these LNG power plants to the Chinese ? It is only a matter of time before pakis start offering land/worthless assets to the Iranians for some free gas/oil.
Nukes on offer to the Iranians?
Anujan
Forum Moderator
Posts: 7807
Joined: 27 May 2007 03:55

Re: Pakistani Economic Stress Watch

Post by Anujan »

Dilbu wrote:I think it is the other way around. UAE will take control of the plants including the fuel supply and they will switch off the power supply whenever pakis step out of line. With the ever deteriorating power situation in the country, pakis will not be able to survive without the plants and they will be at their mercy. But hey this is TSP we are talking about and they will always find some or other way to pull the wool over four fathers.
It is not that simple. Let us assume UAE switches off the power plants. Then it is sitting on useless power plant that it spent a lot of money on, that is not generating any returns. Secondly, this will invariably lead to public outcry, political instability and judgements and enforcement from Pakistan's courts against UAE "Phoren power producer is punishing Pakistani Abduls, Jeeeeeehhhhhaaaaarrrrrddddd on them!!!"

You probably heard this joke: "If you owe the bank (UAE) Rs 1000, it is your problem. If you owe the bank (UAE) Rs 1000 crore, it is the bank's problem".

To remedy this, UAE would want sovereign guarantees from the government of Pakistan. But the Chinese have a better sovereign guarantee that they would be paid first. In any case, what use are sovereign guarantees if the govt is going to default anyway?

The best idea for UAE is to take over telecom companies, with a law that guarantees that they will be the sole monopoly. Or maybe PIA, or some such infra that is used only by the rich.

UAE can also get agricultural land, with guaranteed water supply and export the food to UAE. Remember that food exports are a disguised way of exporting water (thats why cheen has been investing in agri in Pakistan). Which probably guarantees food security to UAE.
bharathp
BRFite
Posts: 453
Joined: 24 Jul 2017 03:44

Re: Pakistani Economic Stress Watch

Post by bharathp »

Ambar wrote:Question is why arent they offering these LNG power plants to the Chinese ? It is only a matter of time before pakis start offering land/worthless assets to the Iranians for some free gas/oil.
because the chinese want to be paid for regularly
the chinese created a road from nowhere to nowhere
told the TSPs that there will be thousands of verhicles on this road an hour and asked them to collect the toll but pay a little % of it in return
and we will throw in a few power plants that will jump start your industries - we wont give you industries, just the power plants and the roads
we are doing this out of the goodness of our hearts, cos dekho we are both enemies of India and we want to help you compete and beat India
VishnuS
BRFite
Posts: 129
Joined: 19 May 2022 09:42

Re: Pakistani Economic Stress Watch

Post by VishnuS »

Anujan wrote:If UAE buys the LNG fired plants, it'll be an idiot. Pakistan does not pay power companies.

UAE would have to operate the plants, pay for LNG, pay for power generation and not get paid for generating that power.
On contrary that is better for us in the long run.

First they will get to have firsthand experience of how Pak works....

Now when the payment is not done, UAE will simply shutdown those plants. No power generation!!

UAE folks are known to be one of the toughest negotiators!! They are practical and economic to core. They know how to extract their investments back.
Manish_P
BRF Oldie
Posts: 5413
Joined: 25 Mar 2010 17:34

Re: Pakistani Economic Stress Watch

Post by Manish_P »

Slip of the tip of the finger perhaps... but soon, inshaallah

Yawn - Rupee rout continues, drops to new low of 228.50 against dollar
According to the Forex Association of Pakistan (FAP), the rupee depreciated 75 paise — a slump of 0.33pc — against the previous day’s close of Rs 227.75 to reach Rs 228.50 by 12:35pm.

The FAP’s closing rate of the last session is higher than the State Bank of Pakistan’s (SBP’s) closing rate of Rs 266.81. :mrgreen:

...

According to the SBP data, the exchange rate rose to a record high of Rs 215.2 on Monday, peaked to Rs 222 on Tuesday, surpassed the Rs 224 mark on Wednesday and reached Rs 226.81 on Thursday.
mody
BRFite
Posts: 1362
Joined: 18 Jun 2000 11:31
Location: Mumbai, India

Re: Pakistani Economic Stress Watch

Post by mody »

Best asset for UAE o buy would be port Qasim in Karachi!! Get complete control over the port, including the land.
Post Reply