The Pakistani rupee fell from 115.63 at the start of last week to its lowest value ever of 121.39 against the US dollar by day-end on Thursday, ahead of the Eid holidays.
This is the third fall of the Pakistani currency in the past six months. In December last year, the rupee fell below the 110 mark for the first time in history, with the then finance minister Ishaq Dar engulfed in corruption cases.
Officials close to Dar told Asia times that the former Pakistan prime minister was behind maintaining the rupee’s artificial value around the 100 mark. “He always said 100 is a psychological number, and we should make sure that the rupee doesn’t fall too far below that,” a former aide of Dar told Asia Times. This ensured that the rupee fluctuated around the 100 mark for the most part of Dar’s five-year tenure as finance minister.
The rupee then crossed the 115 mark in March this year after the State Bank of Pakistan (SBP) cut support, bringing the currency closer to its actual value. It was hoped that the move would help increase exports and address Pakistan’s $10 billion current account deficit.
However, with no significant impact on exports over the past three months, the SBP was pushed to address the relentless pressure on the country’s foreign currency reserves. “The market-based adjustment is reflective of the country’s external balance of payments position which is under pressure due to a large trade deficit,” a statement issued by the central bank read.
Former caretaker finance minister Salman Shah believes there might be more devaluation of the rupee, but says that most of it has taken place.
“The central bank is no longer supporting the rupee and its value reflects the demand and supply situation. So the devaluation will stop once the rupee reaches its true value. And I think most of the pressure has now been released,” he told Asia times.
Shah also believes that the Eid holiday period can actually provide some respite to the local currency. “There is usually an uptick of remittances around Eid. So we’ll have to wait and see,” he said. However, the wider consensus among analysts is that the rupee will drop further.
Most of these predictions cite the hefty imports bill that Pakistan has to pay. Senior financial journalist and analyst at FX Empire Shahab Jafry agrees that the rupee will continue to slump. “Traders had seen it coming, because the central bank is no longer supporting the rupee when there is excess demand for the dollar,” he told Asia Times. “Instead of increasing imports, it inflated the debt payments. The only options for the government is a massive loan or massive investment.”
When asked, government officials confirmed that the imports from China, as part of the economic corridor with Pakistan, form a bulk of the imports bill. Salman Shah suggested that the government needs to better schedule its bills. “Scheduling import bills in the longer-term can help avoid a further slide. The government needs to improve its debt management and extend its maturity structure. And it’s time to make sure that the projects being invested in start giving returns.”
While another bailout appears to be the only way out for the economy, the current caretaker government has ruled out talks with the International Monetary Fund (IMF) for a bailout program. Finance ministry insiders also reveal that Pakistan is “far behind schedule” in its international debt obligations owing to the balance of payment crisis.
Being a former caretaker finance minister himself, Shah conceded that it was difficult for the government to take any long-term measures. “It’s difficult for the caretaker set-up to do much. But yes, they are taking away the artificial support. Maybe they can look for short-term bolstering of reserves by seeking financing from China and improve the CPEC terms and conditions,” he says.
Shahab Jafry says a short-term solution could actually end up helping Pakistan in the long-run. “Whoever gives out the loan will demand austerity, [ask for] more interest rates and will demand that the rupee be moved towards its actual value,” he believes.
Don’t you think the Chinese will bail out Pakistan? Without Pakistan, CPEC won’t be a success and Chinese will lose face. So one need not get panicky! Then of course everything is Khuda Ki merji!
Rohit Pandeya
Yep. See you in 3 months when Pakistan will still be around, lol.
Rohit Pandeya read the history.then call it fitoor.HINDU AND JEWS HAS BEEN RULEBY OTHERS LONGEST THAN ANY OTHER PEOPLE.BECAUSE THEY THINK COUNTING MONEY IS LITERACY AND EDUCATION.
JUSTICE AND RIGHTEOUSNESS NO VALUE FOR THEM.
CURRENCY IS LIKE WATER.IT FINDS ITS VALUE.IT IS NOT END OF LIFE UNLESS YOU DEPEND ON IMPORTED MONEY (DIRECT FOREIGN INVESTMENT) AS BHARAT IS TODAY.
Aditya Shetty .what ALLAH HAS TO DO WITH VALUE OF A RUPEE.rupee is piece of paper.it can go up and down.one of german origin patient told me they used to take CART FULL OF MARKS TO BUY A LOAF OF BREAD.RIGHT AFTER WW2.
Currency is like water it finds its level.IT IS NOT END LIFE OR WORLD AS YOU ARE PROJECTING.IT CAN BE TAKEN CARE .you are hindu .you are REALLY JEW.you people are afraid of PAKISTAN.
Devaluation means nothing, but it delights our our Indian friends who gave Pakistan 3 months max in 1947, and generously give us another 3 months year after year. Thank you.
After WWII it was said in Europe’s capitals – Berlin, London, Paris, Rome that America was so rich that Europe could survive on its throwaways, and Asia (read China) was so poor that it could live on Europe’s garbage. India was an exception.
Because of European 1914-45 suicide all investment came to India that grew so fast that by 1947 Manchester could no longer compete with Calcutta on quality or price. English money with Hindu labour put India on sold industrial foundation and germinated a Hindu middle class. It was not Gandhi/Nehru that freed India – the Raj with back broken by Hitler showed a clean pair of heels on fear that English capital with Indian labor would cripple English industry with tariff-less imports (cf American industry and China today).
Independence saved England, and Partition saved Muslims. Landowning Muslims and Chinese were 100 as years behind – no European institutions. China was industrial backwater. In 1947 Pakistan had 7 factories (mills), 3 rice and 4 jute, all in now Bangladesh. Today, both Pakistan and Bangladesh have substantial industry that would have never come about had India remained undivided.
By 1962 a progressive China had overtaken caste ridden India where Hindus oppress both Muslims and low caste Hindus. Now in 2018 an egalitarian China is a world power and rich. India still ekes out a 3rd world existence while its 200 million “middle class” milks the rest 1,000 millions. In 1947 despite valiant efforts of Jinnah, the apostle of Indian unity, Hindus refused to live with Muslims forcing Partition. Now Muslims again account for 15-30% of India depending on who is counting. As Hindus still refuse to live with Muslims, another Partition on the horizon.
Like China, Pakistan from scratch has managed to survive and is at the verge of takeoff in the coming era of Globalization and Free Trade. India learnt nothing from successes or failures of others, e.g Pakistan. I cry for India.
Gen. Musharaaf one said,"…Pakistan has done very well so far after its creation in 1947. Out of nothing it has become nuclear power, with a formidable battle tested army and a counterbalance against hegemonic India. It is no push over being the fifth largest democracy in this world. After the completion of CPEC, it will turn out to be an Asian Economic Power – a economic tiger…"
Wait a minute. International loans repayment worry? I thought its the bloody Chinese debt trap?
Vikram Reddy are we wasing our time on him ?? he is worth nothing for us !!
but anyway aren’t we moving away from the real issue of pakistani economy ? people should be worried about that first because we have a nuclear country going rogue and bankrupt that’s a real danger to the world !! we can’t afford to lose nuclear weapons to islamists and jihadis in case pakistani civil government falls due to political instability . it we affect us on a larger scale , we must do something about it !!
Andler Von Steuben You are a Paki agent regardless of false names because you stink like a religious extremist. You twisted discussions from econmics to religion.
Dhroov Navadia He is a ISI troll
Andler Von Steuben rape?..read dawn newspaper in porkistan..those sub humans rape children every fuggin day..now go sleep with a camel
Dhroov Navadia
Your country might have a bigger population but if we looked at the per capita income your ranks bottom of the barrel. Ours is $54k annually while yours is somewhere around $1700. You Hindus have such a deep rooted complex. Know your worth slumdog. In Sweden we give women equal rights and hence rapes are reported unlike in your third nation where girls are buried alive at birth and women are murdered before they get a chance to report their rapes, which you lead the rest of the world no doubt. My country is doing well while yours can’t even stop the daily killing of your malnourished soldiers a nation 1/5 your size. Designated Super Power 2030 that defecates openly and is proud of it. Churchill was right to call your people bunch of cowards. Only limited before China wipes the floor with you.
Andler Von Steuben AND how convenient it is for you to demonise other religion just to show that you are not islamophobic . i understand you being white , christian ( with possibility of being atheist) and a european need to prove that you are not islamophobic but when you trun against "hindus" without knowing anything about us, you don’t sound swedish at all !
wait , are you critising hindus just beacsue you know that hindus living in sweden won’t kill you ? well, i must say that you are not the only one who does that !! since birth of hinduism, critism was accepted in my religion so much so that you can even deny the existance of god . i hope it dosen’t make much difference for you, but at the end of the day i understood that even "sweden" is not my cup of tea !!
Andler Von Steuben okay, so should i consider you hinduphobic ? for that insatance let it be xenophobia . and remind me if i am not wrong, where exectly is the rape capital of europe for girls and boys alike ?? well in that contex i was wondering what’s swedens eonomy , i mean whats the gdp in dollars ?? basically i don’t like to communicate in terms of religion but as india is a hindu majority country then let us be called hindu because anyway hindusim is not my religion ! what’s the milatry status of india when compared to pakistan and sweden? how many wars did even pakistan won from india ??
i understand one thing, hate has no bases! as you have no bases for your hate against presumly indians and bascially hindus (actully they are followers of sanata dharma) .
Aditya Shetty
I’m not a Muslim nor I am Pakistani but I understand rape is a big problem in Hindu India. It’s an epidemic wide spread in your culture and religion. I hope things get better and if they don’t more of your people will convert to Islam to escape Hindus like you.
Aditya Shetty what a shame, bringing your true self to table.
Andler Von Steuben sucked off allah yet?..he like lil girls AND boys like u..conveniently u bend over 5 times a day..shoooo cuttteee
This is comedy gold coming from an Indian. As if your people are any better. You’ve always been slaves to outsiders and gladly kiss the heel of any nation just to show your worth. I’d take Muslims over Hindus each and every time because at least with them you get what you see unlike the slumdogs such as yourselves. They are braver than your nation will ever be.
Your soldiers are getting killed at the LOC day in and day out by a beggar nation.
"India is the largest recipient of loans from the World Bank, amounting to $102.1 billion, between 1945 and 2015 (as on July 21, 2015), according to the Bank’s lending report.
While the International Bank for Reconstruction and Development (IBRD), a part of the World Bank group, has lent $52.7 billion, the International Development Association (IDA), a multilateral concessional lender of World Bank, has loaned $49.4 billion to India over the last 70 years.
The Ministry of Finance tabled an updated figure of $103 billion (IBRD—$53 billion and IDA—$50 billion) in a reply to the Lok Sabha (Parliament’s lower house) last month.
India’s loans from the World Bank stand at $104 billion (IBRD—$54 billion and IDA—$50 billion) as on December 31, 2015. Of this, the World Bank has disbursed $73 billion, with India repaying $37 billion.
India is followed by Brazil ($58.8 billion), China ($55.6 billion), Mexico ($54 billion) and Indonesia ($50.5 billion).
The World Bank has been lending funds to India for rural and urban development projectsrelated to transport, water and irrigation, health, power and agriculture.
Source: World Bank; Figures in $ billion; Figures as on 21/07/2015; Note: International Bank for Reconstruction and Development (IBRD), International Development Association (IDA).
IBRD is the world’s largestdevelopment bank and hopes to eliminate poverty by 2030. IDA is the largest multi-lateral source of concessional finance to boost growth and cut poverty.
While IBRD provides loans and assistance to primarily middle-income countries, IDA helps the world’s poorest nations.
Source: World Bank; Figures in $ billion; Figures as on 21/07/2015; Note: International Bank for Reconstruction and Development (IBRD)
Source: World Bank; Figures in $ billion; Figures as on 21/07/2015; Note: International Development Association (IDA)
World Bank (including IBRD and IDA) assistance in 2015 was $42.4 billion, as on July 21, 2015. Africa ($11.6 billion) was the largest recipient, followed by South Asia ($7.9 billion).
IBRD is committed to lend $23.5 billion in fiscal 2015; IDA, $18.9 billion.
India received 9% ($2.1 billion) of IBRD commitments, the largest to any country in 2015 and, after Bangladesh, the second-largest ($1.7 billion) in terms of IDA assistance ($1.9 billion).
Water, sanitation and flood projects in India receivedthe most World Bank funding (27%), followed by finance (19%), transportation (18%), education (11%), public administration and law (10%), agriculture (8%), health and social service (4%), information and communication (2%), and energy and mining (1%).
Top Countries: World Bank Commitments, Disbursements And Net Transfers, 2015, By Region.
I hope this light dose heals you. Best of luck
the implosion begins..pass the popcorn..the beggar will be selling his bowl and then his emanciated disease ridden body next.