Pakistani Economic Stress Watch

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anupmisra
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Re: Pakistani Economic Stress Watch

Postby anupmisra » 23 Jul 2018 03:26

dhyana wrote:Official figures reviewed by the Journal show that Chinese-backed power plants were promised annual returns on investment of up to 34%, guaranteed by Pakistan’s government, in dollars, for 30 years.


Is that correct? Up to 34%? Therefore, if correct, the returns could even be zero? If not correct, then the chinis negotiated for themselves one heck of a sweetheart of a deal. 34% levered IRR over 30 years. That's a multiple of 6502X plus return of the original investment. Plus the loans would be paid back first with the interest carry. :eek:

Holy Crap!! What were all those paki bankers with fancy degrees doing?

In 19th century US this kind of investment was called highway robbery (no pun intended, OBORe).

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Re: Pakistani Economic Stress Watch

Postby dhyana » 23 Jul 2018 04:04

Seeing as we don't have access to the source documents (or leakers of said documents), we'll have to go by what the Wall Street Journal says, with the 'up to' caveat. I'm sure there are more 'reasonable' returns negotiated for many projects. But still,it certainly gives an idea as to how utterly incompetent/corrupt the Paki government is. And the dollar-denominated loans are gonna hurt all the more with PKR currency devaluations. Looking forward to IMF-mandated disclosure of the mighty generous CPEC loan terms. Though if the above is true, then China may just bankroll the Pakis even more, to avoid IMF scrutiny?

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 23 Jul 2018 04:46

dhyana wrote:Seeing as we don't have access to the source documents (or leakers of said documents), we'll have to go by what the Wall Street Journal says, with the 'up to' caveat. I'm sure there are more 'reasonable' returns negotiated for many projects. But still,it certainly gives an idea as to how utterly incompetent/corrupt the Paki government is. And the dollar-denominated loans are gonna hurt all the more with PKR currency devaluations. Looking forward to IMF-mandated disclosure of the mighty generous CPEC loan terms. Though if the above is true, then China may just bankroll the Pakis even more, to avoid IMF scrutiny?


I had heard around 19% IRR from a president of a paki bank late last year. This return has paki goberment's soverginity g'ranty. That's why the current caretaker goberment wants nothing to do with it.

When PKR value depreciates over the next 30 years to 1/30th and the returns to the chinis will be in Yawn (or US Dollar?), that's when it will pain the pakis the most because all their revenue (bhatta) collection will be in PKR whereas all chini "equity investments" and loans are in Yawn. The beauty of this so called "chini capital infusion" is that the pakis will never see a dime of it. Chini capital will be transferred from one chini financial entity (controlled by uncle eleven) to another service or manufacturing entity (controlled by PLA) as part of internal accounting (and, of course, over invoicing) without setting foot in pakiland.

Diabolical, isn't it? Hail SeePack.

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Re: Pakistani Economic Stress Watch

Postby Yagnasri » 23 Jul 2018 07:44

Pokes in their hate for bania Hindus are getting s&&&ed by the bania lizards. Nowhere such interest rates can be paid. By the way, what will be the cost of the power and at what cost it needs to be sold? Is there going to be any buyer for such costly power in pokeland? Questions and more Questions.

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Re: Pakistani Economic Stress Watch

Postby Prem » 23 Jul 2018 09:56

Yagnasri wrote:Pokes in their hate for bania Hindus are getting s&&&ed by the bania lizards. Nowhere such interest rates can be paid. By the way, what will be the cost of the power and at what cost it needs to be sold? Is there going to be any buyer for such costly power in pokeland? Questions and more Questions.


Chinese thermal power plants have life spans of couple of years, repair and replacement gonna double , triple this whammy to
Pakistan Ka Matlab Kya Hai,
MAO Allah, XI Awaliya, CPEC Game changer Rassoolaa.

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Re: Pakistani Economic Stress Watch

Postby jpremnath » 23 Jul 2018 10:33

anupmisra wrote:
dhyana wrote:Official figures reviewed by the Journal show that Chinese-backed power plants were promised annual returns on investment of up to 34%, guaranteed by Pakistan’s government, in dollars, for 30 years.


Is that correct? Up to 34%? Therefore, if correct, the returns could even be zero? If not correct, then the chinis negotiated for themselves one heck of a sweetheart of a deal. 34% levered IRR over 30 years. That's a multiple of 6502X plus return of the original investment. Plus the loans would be paid back first with the interest carry. :eek:

Holy Crap!! What were all those paki bankers with fancy degrees doing?

In 19th century US this kind of investment was called highway robbery (no pun intended, OBORe).


I think it's profit margin and not interest on loan

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Re: Pakistani Economic Stress Watch

Postby pankajs » 23 Jul 2018 11:03

Might well be 34% return on investment. On paper you get 17% assured ROI but the cost being gold plated and/or sub-standard cheaper goods supplied @ full price the cost will push your ROI to 34%. E.g. China supplies an equipment @ 100 for 17% ROI but the actual cost was only 50. That in effect makes the ROI 34%.

Highly possible. IIRC, when 16% row was mentioned for the first time I had posted that ROI was likely 32% *assuming* a 100% gold plating of the projects. Not far off the mark!

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 23 Jul 2018 17:28

pankajs wrote:Might well be 34% return on investment.


annual returns on investment of up to 34%


This above phrase from the WSJ article got my attention. Besides the stupendously high multiple, the extended period used to calculate the IRR (viz., 30 years) is astounding. I assumed the IRR was levered (an unlevered IRR of 34% would have floored me).

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 23 Jul 2018 17:43

Many CPEC projects in doldrums as NHA faces financial crisis

A number of road projects related to the $52 billion China-Pakistan Economic Corridor (CPEC) are said to be in doldrums as the National Highway Authority (NHA) faces financial crisis.
Sources told Dawn that contractors have stopped work on several CPEC projects after their cheques worth over Rs5 billion had bounced a couple of days ago.
The firms whose cheques have bounced include SKB, ZKB, Noman Construction, ACGC Chinese, Sardar Ashraf D Baloch, China Railway 17 Group and Matracon.
The sources said that not only the CPEC projects but local industries related to construction and a large workforce of engineers and labourers have also been hit by the situation.


https://www.dawn.com/news/1421877/many- ... ial-crisis

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Re: Pakistani Economic Stress Watch

Postby pankajs » 23 Jul 2018 19:04

anupmisra wrote:
pankajs wrote:Might well be 34% return on investment.


annual returns on investment of up to 34%


This above phrase from the WSJ article got my attention. Besides the stupendously high multiple, the extended period used to calculate the IRR (viz., 30 years) is astounding. I assumed the IRR was levered (an unlevered IRR of 34% would have floored me).

I have thought over it and it seems 34% would be the return on EQUITY and not the asset i.e. to the Chinese Investor/Investor money where most of the financial would be debt. Definitely a leveraged play.

Some report suggest that the cost of debt is 6-8% on the dollar amount where as the assured ROE i.e. the cost of equity is 17%. The cost of capital for the project could vary between 8% if it was fully debt funded to 17% if it was fully equity financed.

Assuming an 2:1 debt to equity mix, the cost if capital would be 11% [(2 x 8% + 1 x 17%] / 3]. The project would have to generate 11% or above return of investment to break even.

If the project has been gold plated as I suspect 11% on the inflated cost of 200 for a project worth 100 would be 22% return on actual value delivered by the project.

This is all guess work btw.

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Re: Pakistani Economic Stress Watch

Postby sudhan » 23 Jul 2018 19:52

CPEC is a game changer..

Game of "Grab the begging bowl"

Changed to

"Grab the tub of vajjelin and BO.."

Is there any (non ISPR inspired) news about positive impact of CPEC?

Cause they dont make begging bowls big enough for paki needs..

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Re: Pakistani Economic Stress Watch

Postby Bart S » 23 Jul 2018 20:37

Prem wrote:
Yagnasri wrote:Pokes in their hate for bania Hindus are getting s&&&ed by the bania lizards. Nowhere such interest rates can be paid. By the way, what will be the cost of the power and at what cost it needs to be sold? Is there going to be any buyer for such costly power in pokeland? Questions and more Questions.


Chinese thermal power plants have life spans of couple of years, repair and replacement gonna double , triple this whammy to
Pakistan Ka Matlab Kya Hai,
MAO Allah, XI Awaliya, CPEC Game changer Rassoolaa.


In addition the cost of power generated by those plants (due to the basic cost being heavily inflated plus using high interest debt) is significantly higher than neighbouring countries let alone China/Indonesia/Vietnam etc, so Pakis will find it hard to price exports competitively.

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 23 Jul 2018 21:11

pankajs wrote:Assuming an 2:1 debt to equity mix, the cost if capital would be 11% [(2 x 8% + 1 x 17%] / 3]. The project would have to generate 11% or above return of investment to break even.


Project finance in such deals is based on 80 - 85% leverage.

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Re: Pakistani Economic Stress Watch

Postby yensoy » 23 Jul 2018 21:59

Bart S wrote:In addition the cost of power generated by those plants (due to the basic cost being heavily inflated plus using high interest debt) is significantly higher than neighbouring countries let alone China/Indonesia/Vietnam etc, so Pakis will find it hard to price exports competitively.


That's when you cut business deals with the likes of Sharif et al, to purchase for Rs 100 what cost them Rs 150 to produce; Sharif et al will ensure that the government eats the loss through some ingenious roundabout subsidies, so much so that they are able to net a 30% profit and a good name that they are earning precious forex by exporting such-and-such to India. So in effect for every Rs 100 of commodity we purchase from the Pakis, their own government is losing Rs 80.

To add salt to the wound, we in turn value-add on this commodity and export it to the international market for Rs 500, undercutting Pakis from the finished goods market entirely. That is bunya thinking.

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Re: Pakistani Economic Stress Watch

Postby nachiket » 23 Jul 2018 22:19

Nadeem Javaid, chief economist of Pakistan’s planning ministry, suggests China should rescue Pakistan with an interest-free loan. “It would be a kind of favor,” he says. If not, “for what do we have this friendship?”

This one sentence succinctly captures the essence of pakistaniyat. I don't know how they managed to cultivate this astonishing sense of entitlement into the entire country, top to bottom.

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Re: Pakistani Economic Stress Watch

Postby Bart S » 24 Jul 2018 02:09

nachiket wrote:
Nadeem Javaid, chief economist of Pakistan’s planning ministry, suggests China should rescue Pakistan with an interest-free loan. “It would be a kind of favor,” he says. If not, “for what do we have this friendship?”

This one sentence succinctly captures the essence of pakistaniyat. I don't know how they managed to cultivate this astonishing sense of entitlement into the entire country, top to bottom.


Along similar lines, this comment from the Dawn article on CPEC having run into rough weather:

Ber
about 18 hours ago
Isn't China funding the projects ? The delay or the fund shortage must and because of some communication gap. China has surplus funds and has never defaulted on payments.

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Re: Pakistani Economic Stress Watch

Postby Suraj » 24 Jul 2018 02:24

Bart S wrote:Along similar lines, this comment from the Dawn article on CPEC having run into rough weather:

Ber
about 18 hours ago
Isn't China funding the projects ? The delay or the fund shortage must and because of some communication gap. China has surplus funds and has never defaulted on payments.

:rotfl: The guy's suggesting that the LENDER will 'default' on offering the loan ? :rotfl:

There's regular entitlement, and then there's this level of entitlement 8)

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Re: Pakistani Economic Stress Watch

Postby yensoy » 24 Jul 2018 08:52

nachiket wrote:
Nadeem Javaid, chief economist of Pakistan’s planning ministry, suggests China should rescue Pakistan with an interest-free loan. “It would be a kind of favor,” he says. If not, “for what do we have this friendship?”

This one sentence succinctly captures the essence of pakistaniyat. I don't know how they managed to cultivate this astonishing sense of entitlement into the entire country, top to bottom.


I have to admit that Djinna was on to something when he pushed for the 2-nation theory. 220 million people living in this kind uniform delusion, no bloody way we could have all got along.

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Re: Pakistani Economic Stress Watch

Postby pankajs » 24 Jul 2018 10:48

Alla needs to show some mercy to the bakis.

Their CPEC debt is dolla denominated but the baki Rupee is express train down. The bakis will end up paying a very high price for whatever little benefit from the CPEC projects. After all the dollar value of the debt/interest and Chinese investor's equity/Assured return on that equity will not change.

That is to say, if the Per unit Bijli cost was budget @ PKR 12 now it might be 16 and on the rise.
Last edited by pankajs on 24 Jul 2018 11:08, edited 1 time in total.

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Re: Pakistani Economic Stress Watch

Postby pankajs » 24 Jul 2018 10:53

Suraj wrote:
Bart S wrote:Along similar lines, this comment from the Dawn article on CPEC having run into rough weather:


:rotfl: The guy's suggesting that the LENDER will 'default' on offering the loan ? :rotfl:

There's regular entitlement, and then there's this level of entitlement 8)

In the same piece, the Chinese are talking about the moral hazard of bailing out the bakis. If they bail out one the rest of the BRI/OBOR participants will demand similar concessions.

The same hold true for default. No one will want to be the first but once someone default and the Chinese don't teach such a party a lesson the rest will take it as a signal to default too.

Maybe the bakis will be the ones to set the tone on defaults too for their tarrel than mountain and sleeter than honey fliend.

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Re: Pakistani Economic Stress Watch

Postby Neshant » 24 Jul 2018 16:39

It should become obvious within a couple of years that the Cpec generates negative cash flow and will do so for the foreseeable future.

Its then going to be quite a show to see how China demands payment or handing over of the Cpec infrastructure it built supposedly for Pakistan's benefit.

Project a little beyond that and you can see where this is all headed.

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Re: Pakistani Economic Stress Watch

Postby nachiket » 25 Jul 2018 00:25

Positive news all around.

Pakistan curbs imports amid a foreign exchange crisis

Faced with a current account deficit of US$16 billion, the SBP on Monday slapped a 100% cash margin on 131 “non-essential” items to arrest the deterioration in the reserves position. The move will discourage imports as many will find it difficult with liquidity constraints to make the 100% advance payments needed for opening a letter of credit.


“Not all the classified items are non-essential as the bank claimed because it does include items which are used as raw materials and the local industries need them to keep their wheels turning,” Abdul Basit Haji Abdul Razzak, acting president of the Karachi Chamber of Commerce & Industry, told Asia Times.

Such goods include air conditioning parts, gum base for chewing gum, compressed natural gas (CNG) kits, bike saddles, data-processing equipment, vehicle-suspension shock absorbers, evaporators, sealed-beam lamp units, auto bulbs and a host of other items the bank deemed as critical raw materials used by local industries.


Ishaq, who is also an importer from China, revealed that the commercial banks were reluctant to trade in yuan, which they think lacks stability compared with the US dollar.


“Unfortunately, in its craze to shore up foreign-exchange reserves and avoid a crisis, the central bank hit the small importers hard by withdrawing advance payment facilities. These items are required by cottage industries for imports without opening a letter of credit or bank guarantee,” he said.

Ishaq also said that small and cottage industries would suffer a great deal on this count.


He claimed that if the 100% cash margin requirement imposed by the central bank did not work, then it might impose a total ban on the import of machinery and infrastructure goods. That would hamper the import of components needed for the multibillion-dollar China-Pakistan Economic Corridor (CPEC) project.

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Pakistani Economic Stress Watch

Postby Peregrine » 25 Jul 2018 02:08

X Posted on the Terroristan Thread

At PSX, money may have been lost, but not hope

KARACHI: It has not been a pleasant ride for stock market investors in the last 13 months. A peak of 52,876.46 on May 24 has been followed by periods of turmoil, uncertainty, rupee devaluation, worsening economic indicators and dent on companies’ earnings.

But investors, especially those vested in the stock market, may have lost money, but rarely lose hope.

Analysts and experts now believe the worst could very well be over for investors at the Pakistan Stock Exchange (PSX). The KSE-100 Index, a benchmark for market performance, has already given a taste of things to come. It gained over 2% a day before the elections, but only after losing close to the same amount a day earlier.

A majority of participants and stakeholders have now reached consensus that stocks could now see an upside on a path that was unclear before.

The pace of the recovery, however, would largely depend on the outcome of the general elections scheduled for Wednesday (today).

A clear majority for a political party would mean quicker decision-making and bode well for the economy. On the other hand, a hung parliament could stall the same process, and create uncertainty – a scenario investors abhor.

What analysts and experts say

JS Global Research Head of Equity Sales Atif Zafar said he anticipates a rally in the post-election period. “The stock market has maintained an uptrend in the post-election era in four of the previous five elections,” said Zafar.

However, Arif Habib, the chief executive of Arif Habib Group, said timely elections and smooth transition of democratic power – only the second time in Pakistan’s history – will weigh more on investor sentiment than the outcome.

“Irrespective of any form of government (simply majority or hung parliament) that comes into power, the KSE-100 would go back to 50,000 points by the end of December,” he said.

His statement is a reminder to stock market investors of the healthy bull run the PSX enjoyed in calendar year 2016, when Pakistan emerged as the top-performing market in Asia. Inclusion in the MSCI Emerging Markets Index and an economy on course to register higher GDP growth, along with a stable government in place, gave impetus to the bullish sentiment.

However, change in the taxation regime and lower-than-expected inflows post-MSCI inclusion, along with upheaval in the political arena, has more than disturbed the growth.

“Two factors would dominate recovery in the post-election era. Firstly, stock prices have dropped to attractive buying levels and secondly, political instability would come to an end,” Habib added.

AKD Securities Chief Executive Officer Farid Alam said the worst is behind investors. “The elections would bring an end to the worst [political developments] in Pakistan. Political instability and noise, which painted a negative image of Pakistan and its markets, [fiscal, trade and current account] deficits on the higher side; all this would become part of history with the upcoming election.

“If any of the two leading political parties, Pakistan Tehreek-e-Insaf (PTI) or Pakistan Muslim League-Nawaz (PML-N), takes over 100 seats in the National Assembly, it would give clarity to the market to maintain its momentum,” he said.

The pace of the recovery would also depend on the speed with which foreign exchange reserves, which have dropped to an alarming level, recover.

“If the incoming government quickly arranges [borrows] $10-12 billion from unilateral and multilateral donors or lenders, it would help the economy and the market recover quickly,” he added.

He, however, said he expects the rupee to weaken further to Rs132-133 against the US dollar from the current Rs128.5 in the post-election period. “This would also impact the market accordingly,” he said.

All, however, agreed that banks, export-oriented companies (like value-added textile), import substitute companies (like chemicals and fertilisers) and independent power producers would lead the rally.

They expected mutual funds and foreign investors (the two large segments of investors at the PSX) would return to their buying spree after the rupee settles.

Cheers Image

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Re: Pakistani Economic Stress Watch

Postby dhyana » 25 Jul 2018 10:42

China Disputes Infrastructure Projects Are Swamping Pakistan With Debt

In defending the CPEC, the Chinese Embassy said that Pakistan’s debt troubles, if any, are caused by multilateral lenders and the Paris Club of 22 large creditor nations. That group doesn’t include China.
...
The statistics quoted by the embassy, however, appear partial, including only low-interest or concessional Chinese loans to Pakistan’s government for transport projects. Those loans accounted for about 10% of Pakistan’s $66.9 billion in total public debt and liabilities at the end of December 2017.

Seemingly excluded from the embassy’s figures are more than $12 billion of Chinese commercial loans that Pakistan’s official statistics show have gone to completed and ongoing energy projects, as well as some $3 billion in emergency funding that Pakistani officials say has come from Chinese commercial banks to support Pakistan’s foreign-exchange reserves.

Selective quoting of statistics? An official rebuttal from the Chinese Embassy in Islamabad itself? I give up. These are obviously much more credible than than the WSJ's journalists, IMF reports, Nikei Asian Review articles, etc. And the kicker, as elucidated by several other sources...

The Pakistani government is guaranteeing high investment returns by promising to buy electricity at fixed prices, a portion of which is committed for repaying the loans, according to official figures reviewed by the Journal.

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Re: Pakistani Economic Stress Watch

Postby Yagnasri » 28 Jul 2018 11:40

I have dealt with such projects in India. No way such returns are going to come. As I posted before pakis are having midday dreams.

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Re: Pakistani Economic Stress Watch

Postby pankajs » 29 Jul 2018 16:06

https://tribune.com.pk/story/1767090/2- ... asad-umar/
Crisis severe, no option to be ruled out, says Asad Umar

The Ministry of Finance, the IMF and independent economists have assessed Pakistan’s gross external financing needs for 2018-19 to fall in the range of $23 billion to $28 billion. As usual, finance ministry’s estimates of roughly $23 billion financing needs are at the lower end. The IMF has assessed the needs to be at $27 billion and independent economists like Dr Hafiz Pasha have calculated the needs to be at $28 billion.

Bakis gross external financing needs will be between $23 and $28 Billion for the next year. What will happen in 2021-22 when the actual CPEC repayment will be underway in full swing.

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 29 Jul 2018 18:10

Breathing space for smooth transition: China loans Pakistan $1.5 to $1.7 That's Billion with a Bee.

In a bid to get a breathing space for Pakistan for completion of ongoing political transition in a smooth manner, China has provided $1.5 to $1.7 billion in shape of official bilateral loan on soft terms and conditions to Islamabad out of total agreed size of $2 billion assistance.
However, economic experts believe this bilateral assistance from China cannot become alternative to the IMF program keeping in view the projected financing gap in the range of $26 to $28 billion for the current fiscal year 2018-19.
Imran Khan also met with Saudi Ambassador in Islamabad which also raised hopes that the Kingdom might provide few billion dollars as a sign of good gesture for the new government as Riyadh had provided $1.5 billion to the PML-N-led government in 2014 as a gift.
China had provided over $6.5 billion on different accounts to Pakistan in last fiscal year and again agreed to provide $2 billion more in this fiscal year but it could be used as “breathing space” only.


Come on, paklurks. Aren't you just tired, ashamed and plainly embarrassed of begging? Your nation has been living off the largess of others for 70 years.

https://www.thenews.com.pk/print/347674 ... 1-5-to-1-7

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Re: Pakistani Economic Stress Watch

Postby dhyana » 29 Jul 2018 18:30

To add further fuel to pankajs and anupmisra's articles... No option but to go to IMF

The literal money quotes:

PTI leader Asad Umar...who is frontrunner for the office of the finance minister... said currently the country faces a monthly deficit of $2 billion, adding the scheme could not help overcome the deficit of even one and a half day. He said the country’s forex reserves stand at $9 billion which included $7 billion advance loan.

The PTI leader said the actual forex reserves of Pakistan are $2 billion.


Is this the first official acknowledgment of a politician that they've been lying about their reserves all along? Though I think Peregrine has calculated even worse numbers. Still, the IMF likes pseudo-honesty. It's a fresh start for Pakis to fess up. :)

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Re: Pakistani Economic Stress Watch

Postby Trikaal » 29 Jul 2018 18:59

Unless China is willing to loosen purse strings fast, CPEC loand are going to become public very soon. No more room left to hide it. Lets see kitne kaa bill fatta hai

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Re: Pakistani Economic Stress Watch

Postby pankajs » 29 Jul 2018 21:24

I think China should just take Bakistan over lock stock and barrel. Will do both of them lot of good when in such a tight embrace.

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 29 Jul 2018 23:32

IDB activates $4.5b credit facility for Pakistan’s oil imports

The Islamic Development Bank (IDB) has activated its three-year $4.5-billion oil financing facility for Pakistan that will give stability to rupee-dollar exchange rate in the interbank market that has largely remained under pressure.
The International Islamic Trade Finance Corporation (ITFC), a member of the IDB Group, rolled over a loan of $100 million this week
The last Pakistan Muslim League-Nawaz (PML-N) government had sought $5 billion in aid from Riyadh, but it did not succeed.
The fresh facility has been obtained at the London Interbank Offered Rate plus 2.27%, which is 48 basis points cheaper than the previous facility, said the sources.
Pakistan’s external sector problems aggravated over the past one year. The State Bank of Pakistan (SBP) lost $6.7 billion or 41.4% of its reserves in the last fiscal year 2017-18. In the year, the country recorded the highest-ever current account deficit of $18 billion due to record imports of $60.9 billion.


https://tribune.com.pk/story/1768572/2- ... l-imports/

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Re: Pakistani Economic Stress Watch

Postby Peregrine » 30 Jul 2018 02:08

dhyana wrote:To add further fuel to pankajs and anupmisra's articles... No option but to go to IMF

The literal money quotes:

PTI leader Asad Umar...who is frontrunner for the office of the finance minister... said currently the country faces a monthly deficit of $2 billion, adding the scheme could not help overcome the deficit of even one and a half day. He said the country’s forex reserves stand at $9 billion which included $7 billion advance loan.

The PTI leader said the actual forex reserves of Pakistan are $2 billion.


Is this the first official acknowledgment of a politician that they've been lying about their reserves all along? Though I think Peregrine has calculated even worse numbers. Still, the IMF likes pseudo-honesty. It's a fresh start for Pakis to fess up. :)
dhyana Ji :

Indeed I had quoted from the Article After debt repayments in coming months, SBP’s own net reserves will be a mere $4.5 billion and I give below the pertinent portions :

1. As of November 2017, the SBP’s official foreign currency reserves were $12.66 billion including $5.8 billion worth of currency swaps and forward contracts. Despite showing $5.8 billion as part of its own reserves, the SBP has also included the same amount in the total $6.01 billion reserves held by commercial banks.
2.“This is clearly double counting of $5.8 billion. In principle, it should have excluded this sum from the commercial banks’ reserves,” said Dr Ashfaque Hasan Khan, former director general of Debt of Ministry of Finance.
3. In 1998, the then PML-N government had consumed foreign currency deposits of commercial banks after global powers imposed sanctions on Pakistan in retaliation to nuclear bomb explosions. However, to protect depositors’ reserves, the central bank had started separately reporting both the official and private currency reserves.
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sanjaykumar
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Re: Pakistani Economic Stress Watch

Postby sanjaykumar » 30 Jul 2018 03:02

Did India’s reserves not touch $425 billion recently?

Is this also a difference between Hindu India and Muslim Pakistan? What would Jinnah say?

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Re: Pakistani Economic Stress Watch

Postby pankajs » 30 Jul 2018 09:02

Jinnah would say that India and Muslim Bakistan both should have one vote on how to divide that pile of money.

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Re: Pakistani Economic Stress Watch

Postby RKumar » 30 Jul 2018 14:24

NaPaki and Indian media are already publishing stories on how to distribute Indian wealth with a troubled neighbor :rotfl:

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Re: Pakistani Economic Stress Watch

Postby pankajs » 30 Jul 2018 15:27

One retired Army guy seemed to suggest that we should fill up the Baki budget/project gap rather than let the Chinese rush into that space. That way, per him, we will have a greater say in Baki affairs.

Pity such folks. Bakis will derive special pleasure in taking our money and then defaulting. What could be more satisfying to a baki than taking India for a ride! There folks don't understand the first principle of Bakistaniyat.

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Re: Pakistani Economic Stress Watch

Postby chetak » 30 Jul 2018 16:01

pankajs wrote:One retired Army guy seemed to suggest that we should fill up the Baki budget/project gap rather than let the Chinese rush into that space. That way, per him, we will have a greater say in Baki affairs.

Pity such folks. Bakis will derive special pleasure in taking our money and then defaulting. What could be more satisfying to a baki than taking India for a ride! There folks don't understand the first principle of Bakistaniyat.


I also monitored the tweet from the army guy. My polite comment would be "Ek dhoondo sau milega"

sanjaykumar
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Re: Pakistani Economic Stress Watch

Postby sanjaykumar » 30 Jul 2018 16:26

Please to provide a link only.

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Re: Pakistani Economic Stress Watch

Postby pankajs » 30 Jul 2018 16:55

Presented as an anecdote of what passes for informed analysis by responsible adults rather than as a news worthy item by itself.

On Twitter via YusufDFI's feed a few days back. No link. One can scan his TL if one is interested.

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Re: Pakistani Economic Stress Watch

Postby Peregrine » 30 Jul 2018 19:41

sanjaykumar wrote:Did India’s reserves not touch $425 billion recently?

Is this also a difference between Hindu India and Muslim Pakistan? What would Jinnah say?
sanjaykumar Ji :

On 20-04-2018 Following are the figures in respect of India's Foreign Exchange :Total Indian Foreign Exchange Reserves as on 13-04-2018 :

Foreign Exchange Reserves : US$ 426.0824 Billion

Increase over Week : US$ : US$ 1.2177 Billion

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