Bharat Rakshak

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.

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.

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.

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.

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.

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.

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

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

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 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...

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

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.

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

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?

“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.”

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?

Neela wrote:

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

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.

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.

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.

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.

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]

6. Bring women into workforce

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.

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

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

@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)

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.

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.