Bharat Rakshak

PKR up to 193 … so close to double century

I have no understanding of economics. Can someone please explain why we don’t see Venezuela type hyper inflation in Pakistan? At least Venezuela has oil?

Pakis produce most of their food in the rich Indus belt perhaps?

Well it depends on money supply and circulation… They need to print more Jinnahs and try to revalue or peg their currency … then it becomes a game of musical chairs possibly leading to hyperinflation…
but first basic advice any economist will give is not to print more but reduce circulation by increasing taxes to reduce inflation… which IMF has said but is politically suicidal..
I am still hoping someone will do a Mugabe and print more Jinnahs… then we will have a Zimbabwe on our hands
I hope btw they are not using INR from their storage and getting away with it.

Tanaji wrote:I have no understanding of economics. Can someone please explain why we don’t see Venezuela type hyper inflation in Pakistan? At least Venezuela has oil?

In general hyperinflation is about sentiment more than economics.

Let us assume that I told you, that your money would be worth 10% less tomorrow than it is today. You want to immediately go out and buy things, because tomorrow your money would be worth 10% less. I am a business I want to sell you things. I want to mark the price up by 10% today because I think tomorrow (by the time the payment clears and I have to buy raw materials) my money will be worth 10% less. So I increase the price today. You are willing to pay the increased price today because tomorrow your money would be worth 10% less. You then go to your boss (me) and ask for 10% wage increase because you cannot afford anything. I then increase the price of my goods by 10% today because I have to pay you higher wages tomorrow. This just goes on and on and on.

I dont know a lot about Pakistan economy. But to give you an idea:

Their remittances was ~30B last year, which is 10% of their GDP. Their exports were ~28B last year. So remittances are a bigger factor than exports.

Vadivel wrote:

nachiket wrote:The deaf and dumb forum is a riot right now. You have PML-N supporters blaming the whole disaster on Dimran while their leaders figure out how to do exactly what they blamed Dimran for when Dimran was in charge. Meanwhile some angry PTI supporters want the whole economy to crash and burn so that the new govt. is thrown out and their dear leader comes marching back triumphantly. Some were even calling for overseas pakis to stop sending remittances in order to make the situation worse. Anger against the Army in general and Bajwa in particular is also palpable. Fun times

I just checked it out and there is a thread on support of slavery which is hilarious , don’t want to link it here though.

Talking about Deff and Dumb, they had quite an 'amusing' engagement on Twitter some days back!

Link

Now see what you guys made me do. I visited D&D after more than 6 years. I had promised myself never to go there. But anyway, what is done is done.
There was one thread that was interesting: "A thread for Pakistanis only, Planning for the worst days to come."
It advises the readers to stock up food, gas cylinders, medicines, guns and ammunition etc. They are expecting that salaries for even government servants may stop due to the financial breakdown. It is written in Romanized Urdu, the writer believes that non-Pakistanis will not be able to understand it. It is written in simple Urdu, any Indian with a knowledge of Hindi will understand it easily. Low IQ due to marrying close relatives has caused such weird thinking.
Gautam

His message may be for the elite class. There is increasing fear in Pakis that Paki economy (followed by state) may go down Sri Lanka route very soon. And Pakis arent as civilized as Sri Lankans. So it would be much worse socially.

The Pak elites already have a foot in Western countries and do not care if Pakistan goes down the drain. The message is for the upper middle class. The lower middle class and the poor have no money left to stock up on anything. There is a great fear about the coming downturn in the economy and the You-tube is full of this.
Gautam

Is it time for PakJab Fauji and finance minister to sell pieces and parts of their land like POK, Gwadar Port, Kruachi, etc. India can hand them the billions and call it a deal.

Dollar reaches all-time high, moves past Rs194 in interbank trade

Dollar reached another high against the rupee on Monday, climbing past Rs194 in the interbank market, as analysts continue to express concern over the country's rising import bill.

According to the Forex Association of Pakistan (FAP), the greenback gained Rs1.30 from Friday's close to reach Rs194.30 around 11:30am in the interbank trade.

Experts raise red flag for economy

“We are at a distance of 30-35 days from Sri Lanka’s (crisis-like situation),” Exchange Companies Association of Pakistan (ECAP) General Secretary Zafar Paracha said while speaking at a conference titled “Strong Rupee – Strong Pakistan” , organised by the Forex Association of Pakistan (FAP) on Saturday.

“Economic emergency should be imposed in Pakistan,” he said, adding all the stakeholders should be on one page and their one-point agenda should be restoration of “economic stability in the country”.

Several other speakers also compared Pakistan’s current situation with Sri Lanka, which defaulted on international payments and faced high inflation, which led to “bloody mass protests” very recently.

FAP Chairman Malik Bostan said Pakistan’s capital markets (currency and stocks) panicked and reacted abnormally to Pakistan Tehreek-e-Insaf (PTI)’s call for long march and protest in Islamabad in the ongoing month of May.

The local currency is hovering around Rs200 against the US dollar in the open market as compared to around Rs155 in August 2021, he pointed out.

Thank you Anujan ji for the explanation. It is interesting that hyperinflation is influenced a lot by the mindset.

Pakistan must take all steps to combat this future by repudiating all its outstanding debts and declaring them null and void citing adherence to the Book as its foremost duty and wellbeing of its citizens.

Dilbu wrote:Dollar reaches all-time high, moves past Rs194 in interbank trade

Dollar reached another high against the rupee on Monday, climbing past Rs194 in the interbank market, as analysts continue to express concern over the country's rising import bill.

According to the Forex Association of Pakistan (FAP), the greenback gained Rs1.30 from Friday's close to reach Rs194.30 around 11:30am in the interbank trade.

PKR beat Saeed Anwar ODI record. Inshallah it will beat Brian Lara test record soon.

Anujan wrote:..
Their remittances was ~30B last year, which is 10% of their GDP. Their exports were ~28B last year. So remittances are a bigger factor than exports.

Anujan ji. A noobish question. Bakistan is hit on both sides (or the two sides of the same coin) - inflation on one hand and a depreciating currency on the other hand.

Overseas bakis have to keep sending more and more remittance if the rate of inflation is faster than rate of depreciation. But if the economy of the west is stalled or in recession (or have inflation of their own) then it becomes even worse for the bakis right?

Overseas bakis don't have enough to send and whatever they can send has less value, despite the appreciation of their local currency versus the baki currency..

So what is worse - inflation rate faster than depreciation rate or depreciation rate faster than inflation rate. Or are both directly proportional anyway (and jihadistan doesn't export much) and so it doesn't really matter..

https://thediplomat.com/2022/05/the-clo ... c-bailout/
The Clock’s Ticking on Pakistan’s Economic Bailout
The new government could either take the decision of cutting fuel subsidies or call for fresh elections and leave that tough decision to an interim government.
Niha Dagia, May 16, 2022
There is a meme on the internet showing three children playing a videogame but only two have their controller cords plugged into the console. The third child, who appears to be the youngest, is being deceived into believing he has stakes in the game.
Pakistan’s social media perceives the youngest child to be the country’s incumbent Finance Minister Miftah Ismail.
Despite repeatedly asserting that fuel subsidies are unfeasible, Ismail announced on Sunday that due to changing circumstances and international oil prices, the Shehbaz Sharif government “may have to revisit…soon” its decision to not increase the price of petrol.
That “soon” would have to come sooner than later as the clock ticks on Pakistan’s economic bailout. Islamabad is already lagging on its commitments to the International Monetary Fund (IMF). Among the conditions set by the IMF for loan resumption is the removal of the fuel subsidy that is costing the country 2.5 billion Indian rupees ($12 million) a day.
The subsidy threatens to take Pakistan toward a default if an agreement is not reached with the IMF. Bilateral donors and friendly countries including China and the Gulf states have also linked their financial support to negotiations with the IMF.
The country’s trade deficit has spiked to $39.3 billion, about $11 billion more than the estimate for the fiscal year 2021-2022. The foreign reserves have also decreased to $10.5 billion – not enough to cover two months of imports.
Although the new finance minister has insisted on taking tough but necessary decisions to fix the economy, his recommendations have been shelved by the premier and the ruling party’s economic guru Ishaq Dar – a former finance minister whose son is married to the PML-N supremo Nawaz Sharif’s daughter.
As opposed to IMF “dictation,” Dar wants a new deal with softer conditions.
Ironically, the coalition had been critical of the previous government’s decision to freeze petrol and power prices for four months (February 28 – June 30) and accused former Prime Minister Imran Khan of derailing the IMF program for political reasons.
......
Gautam

Dilbu wrote:Experts raise red flag for economy

Finally! ZAB's dream of eating grass is coming true!! The experts should raise the green flag of high quality grass, not the red flag.

organised by the Forex Association of Pakistan (FAP) on Saturday.

Pakistan Institute of Strategic Studies has competition now from the Forex Association of Pakistan (FAP) I hope BENIS dhaaga does not discover FAP


I urge our Pakistani brothers to immediately start hoarding petrol and diesel. Your government is trying to increase their prices!!

Apparently (take this with a pinch of salt, nobody knows what is happening in Al-Bakistan anyway) Badmash summoned everyone to Londonistan, because he wants iron clad guarantees from the TFTAs that they will curb the youthias if PML-N has to take unpopular decisions. Like raising fuel prices and electricity prices.

Otherwise badmash is afraid that the youthia call for long march will find many takers if fuel and electricity prices double overnight, they might be forced to call for elections and Kaptaan will win again.

Apparently Bajwa wants to do a round of transfers (Including moving Faiz from Peshawar) so he does not get lamp-posted by youthia supporters inside the army.

Apparently we will see action within the next two weeks. Waiting with popcorn.

^^^ hajam sethi said something similar but like our Coupta twists his argument (democracy .. yada, yada) to suite his POV.

here is my analysis.

ganja wants to come back and have a fresh elections as he thinks he will get a full majority for 5 years, PPP, MQM and Maulana Disel want to have their turn to loot.

Immy is breathing a sigh of relief that the blame of coming anarchy is not his problem and starting a Long March.

TSPA is silently laughing and letting the mokeys play before they sweep in..

There you go... light bulb (off) moment by the eggspurts of al bakistan

PM Shehbaz wants strategy to arrest rupee’s fall

During the meeting, it was also suggested that entire markets across the country should be closed down before the sunset, which would save a substantial amount of energy, reduce the import oil bill and the supply to the general public could be restored.

TSPA does not want to take over.

They learned the difficult lesson under Bandicoot that running the country is difficult and messy. You will end up picking up fights with the courts, the parties, with journalists, with IMF and with US. If civvies are under control, you have plausible deniability. Civvies take calls from Ombaba squeezing their testimonials and TFTAs support the taliban as usual.

Instead they prefer the "hybrid regime". Where the civvies are notionally in power, but all decisions are made in GHQ.

Even now, its a Kaptaan vs Badmash fight, nobody stopped to ask "How did Kaptaan come to power? Who propped up Badmash before him and who deposed him? Before that why were there a dozen Prime ministers under PPP?" Its all because TFTAs get to manipulate from the shadows and do not have to face the wrath of roadside abduls for making a mockery out of the economy.

It's a very encouraging sign that I cannot detect signs of "let's help Pakistan" or "A prosperous stable Pakistan in in the best interests of India" anywhere on Twitter or in print media. In the Bad Old Days the Aman ki Tamasha folks would be out with their candles in full force, demanding that India should bail out Pakistan with our money.

The arguments were aplenty "they are our brothers after all" "do you want 200 million hungry refugees on your border" "do you want to help the Army get legitimacy instead of the civilian government"...

Since 2014, the Overton Window has shifted far enough towards nationalism that such an idea will be considered to be from a fringe lunatic.

Shaktimaan wrote:It's a very encouraging sign that I cannot detect signs of "let's help Pakistan" or "A prosperous stable Pakistan in in the best interests of India" anywhere on Twitter or in print media. In the Bad Old Days the Aman ki Tamasha folks would be out with their candles in full force, demanding that India should bail out Pakistan with our money.

The arguments were aplenty "they are our brothers after all" "do you want 200 million hungry refugees on your border" "do you want to help the Army get legitimacy instead of the civilian government"...

Since 2014, the Overton Window has shifted far enough towards nationalism that such an idea will be considered to be from a fringe lunatic.

Not the usual suspects but nonetheless such voices have slowly started to emerge. Please read a day old article in The Statesman.

https://www.thestatesman.com/opinion/in ... 72468.html

200 is now very close. Baays are playing well.
Rupee sinks to record 197 against USD in inter-bank market

Time to place your bets folks

Who wants to bet against the PKR going above 200 to the USD by this Fridin

Yawn - Dollar upward march continues, interbank trading at record Rs196.50

The US dollar continued its flight against the rupee for the sixth consecutive session on Tuesday to breach the Rs196 mark — an all-time high — in interbank trade, mainly due to the country's depleting foreign exchange reserves and high imports.

PS - Didnt see above post... now 200 looks possible even tomorrow (Dilbu ji magic after all)

I.e 1Kaffir Indian Ruppee gets more than 2.5 Pious Paki Rupees

https://www.thenews.com.pk/latest/95848 ... nst-dollar
Rupee hits another historic low of Rs195.74 against dollar
Pakistani rupee closes at Rs195.74 in interbank market against US dollar
Web Desk, May 17, 2022
KARACHI: Pakistani rupee on Tuesday maintained its downward streak against the US dollar, breaching yet another important threshold of 195 the interbank market to hit its weakest level.
In line with the prevailing trend over the last eight working days, the local currency closed at Rs195.74 against the greenback surpassing its last day's record low of Rs194.18, the State Bank of Pakistan (SBP) reported.
A persistent delay in the receipt of the next tranche of $1 billion from the International Monetary Fund (IMF) is mounting pressure on the rupee.
The situation is likely to remain uncertain for the local currency, AA Commodities Director Adnan Agar said while speaking to Geo.tv.
“If the government decides to remove subsidies on petroleum products, the rupee will bounce back,” he said, adding that the local unit will remain within the range of 180-185.
.....
Gautam
We are almost there. I have a feeling that it will not stop at 200, but plunge further.

Why is the Pk rupee back to 183.55 per google?

Paul wrote:Why is the Pk rupee back to 183.55 per google?

It’s 196 now. Check Bloomberg. Google data is not reliable.

We are beyond the point that PKR could be stabilized by banning luxury imports. Today's import basket in Pakistan includes oil/gas, fertilizer, grains, cotton, tea and pharma which are necessities for their growing population. Any cuts in those and there will be widespread ramifications including a dip in the GDP if not outright social collapse.

Of course the Fauj can stop spending like there is no tomorrow and do their bit to balance the books; but of course that will never happen. Even with our 6 divisions moving over to the Tibet border. God help them.

Porkis will say since it does not have any resources to defend itself even in a short term war it will use its atom bomb as a minimum deterrence against its enemies.

"let's help Pakistan"
I am all for helping the poor nation, we can give them some money and the only thing I ask in return is places like Gwadar, PoK, Sind, etc. The PakJabi Fauji and their so called elected leaders can enjoy the money and slink away to Britshitstan or US!

Paul wrote:Why is the Pk rupee back to 183.55 per google?

its no longer at that point now.

looks like some manipulation going on to keep it under control

bala wrote:"let's help Pakistan"
I am all for helping the poor nation, we can give them some money and the only thing I ask in return is places like Gwadar, PoK, Sind, etc. The PakJabi Fauji and their so called elected leaders can enjoy the money and slink away to Britshitstan or US!

There is a Paki ministerial contingent in India currently to attend an SCO related conference. They are in India for 5 days for some reason. I am 400% sure there will be a reach out to GoI for trade resumption. I hope GoI doesn't budge.

Expect PKR to touch 200 in next 2-3 days. Huge political uncertainty now with milords also joining in the chaos.

Here is the latest situation for Pakis:

8 weeks of forex (around $6B) left. Is dwindling fast and panic is about to set soon (no wonder the PM and his cabinet is panicking).
CAD negative so remittances go into filling a hole with no space left to beef forex reserves.
Open market borrowing at a premium of 9.5% which is for default level. Plus as soon as Pakis borrow some this will move higher. So not an available option
$18 Billion debt payments due every year for next 2 years. No rescheduling possible unless IMF deal is signed. All other lenders have made their deals conditional to IMF deal.
Fuel subsidies are ripping Pakis a new one every day with a double punch of dwindling PKR and rising gas prices.
Reducing import is the only option. Import basket is 80% essentials so cooling down of economy is only solution. Central bank must raise interest rate and government must remove fuel and electric subsidy to cool the economy down.

Overall things are worsening every passing day.

What a bankrupt neighbourhood we live in - Pk, SL, NP, BD !

When is Amir Khan and Bollywodiyas going to Pak to help his momeen biraders?

^^ The best diversion is scheme a green terror attack within India or become hyperactive at the LOC. What are the odds?

Do not phyrr your AKs yet biraders. TSP is meeting with IMF tomorrow and it is likely that they will get another lease of life. However it is just kicking the can down the road a little bit further and things are getting out of hand with each passing year.