ISLAMABAD (November 19 2002) : Moody’s Investors Service, a credit rating agency, has raised outlook to ‘Positive’ from ‘Stable’ on Pakistan’s B3 country ceiling for long-term foreign currency debt on stronger foreign currency reserves and ability to meet external liabilities.
:k:
How's the currency doing vis-a-vis the dollar?
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*Originally posted by Chaltahai: *
How's the currency doing vis-a-vis the dollar?
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Last time I checked, Dollar's future in the market isn't good because it has been commericialized yet. Why? Because we don't have much reserves.
I'm not an economic expert but kinda get the idea where the things are going.........
:k:
[QUOTE]
*Originally posted by Chaltahai: *
How's the currency doing vis-a-vis the dollar?
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Back from its low of 61+ Rupees to a dollar 6 months ago, the rupee just crossed the 58 rupee threshold, and has been rising steadily against the dollar.
The price of petroleum products was decreased just last week, and is due to be decreased yet again before eid, and once more in the next 3 months.
The only thing Id be worried about is consistency, which Musharrafs hold on the presidency seems to assure to a certain extent...but even a harmless move to democracy could affect things negatively, even though that might be temporary.
PT: I am feeling a bit in a tutorial mood. Foreign reserves are dollar denominated intrument. This moneyis not the gov'ts, the govt can only use this by issuing convertibles in rupees against this reserve. If the value of the rupees keep going up, people like expats who have dollar accounts at habib bank or other will come calling and there go the reserves. The gov't uses this as a monetary controlling mechanism. It can never allow the rupee to appreciate too much agains tthe dollar for exim and other reasons such as this.
The trick is balance. If the finance minister doesn't do idiotic things like appropriating for defense more than benchmarked thresholds for their economy, Pakistan can indeed get out of the morass. This is what you have to hope for. Having large reserves means nothing if can easily be lifted out of the country when the creditors come calling.
[QUOTE]
*Originally posted by Chaltahai: *
The trick is balance. If the finance minister doesn't do idiotic things like appropriating for defense more than benchmarked thresholds for their economy, Pakistan can indeed get out of the morass. This is what you have to hope for. Having large reserves means nothing if can easily be lifted out of the country when the creditors come calling.
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If Rupee becomes strong enough to hold against Dollar, doesn't that everyone hopes for?
Defence budget have been cut down from 43% to 29%. But still is not appropriate[No source], I believe. Development projects like Gawadar, Lyrari Express are underway...
Actually PT, if the rupee appriciates against the dollar, then the price of exports goes up. But I think Pakistan is a net importer so this could be good for them. But the issue then again is with FDI, if the return on investment in dollar terms is less than before, the destination is not as attractive. That's why in the coming months you will see the Paki Fed reserver, pump more money into the economic system to drive down the value of the rupee, at the expense of inflation.
Awesome :k:
[QUOTE]
*Originally posted by Chaltahai: *
The trick is balance. If the finance minister doesn't do idiotic things like appropriating for defense more than benchmarked thresholds for their economy, Pakistan can indeed get out of the morass. This is what you have to hope for. Having large reserves means nothing if can easily be lifted out of the country when the creditors come calling.
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And a balanced budget also means nothing if the overall state of the economy is bad. Budgets need to be prepared on a counter cyclical basis.
How much does Pakistan have in forex reserves and foreign direct investment in fiscal 2001 and ytd? Anyone have those numbers?
CH - S&P and Moody's both downgraded India's sovereign ratings this year, and I guess Moody's upgraded Pakistan's. Any reason why India's went down, esp. when India's reserves were what.. $59B last year? I forget how much FDI in India was...
Do u feel there is some slight political hand influencing this, coz credit ratings do a lot to determine FDI for the coming year rite?
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*Originally posted by Chaltahai: *
Actually PT, if the rupee appriciates against the dollar, then the price of exports goes up.
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Pakistan's Trade has been up since the sanctions have been lifted off. In addition to that, Pakistan has put small Arms and Weapons on Sale in order to bring the Economy right on the track. In fact, we are building weapons and submaries for sale.
** Stick to the topic of this thread.**