Rupee's Remarkable Renaissance

Society Pakistan & World Affairs
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Pakistani rupee sees sharp growth against US dollar**

ISLAMABAD: Pakistani Finance Minister Ishaq Dar today said the rupee will strengthen further as it continued to appreciate against the US dollar in the open currency market as well as in interbank trading, taking everyone by surprise.

Currently, the interbank trading rate of the Pakistani rupee is 97.30 per US dollar. Last week, it was trading at about 105.

In an interview, Dar said all out efforts are being made to stabilise the Pakistani currency.

Dealers and market analysts say positive sentiments have helped the Pakistani rupee make big gains against the dollar in the foreign exchange market after it had slipped to as low as 111 last November.

Several measures by the government including ban on import of gold, and higher investment inflows have helped strengthen the rupee, according to state-run Radio Pakistan.

As per the State Bank of Pakistan‚ the country received foreign direct investment of USD 523 million in the first seven months of current fiscal year with USD 106.9 million in the month of January alone.

Source

I once thought that nothing less than a huge oil discovery would bring the dollar back below the 100 mark, but Ishaq Dar seems to have done wonders with the rupee by strengthening it against the greenback.

The US currency lost some of its sheen against almost all Asian currencies this week, Pakistani rupee also benefited from the overall weakness of the greenback. While the development is being cheered across the country, and rightly so, some questions are also there about the sudden rise of the rupee.

The mysterious arrival of $1.5 billion into Pakistan’s kitty remains to be explained. Some quarters are terming the money a reward by two Arab states for convincing Islamabad to do something it wasn’t willing to do.

Has Pakistan agreed to pay a political price to jack up its currency? Let us launch our conspiracy theories :slight_smile:

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Re: Rupee's Remarkable Renaissance

i think it's due to the slide of the US dollar against most currencies. Indian Rupee was trading at Rs. 65 in the last month and today it has gone down to Rs. 59.

our Canadian dollar is sliding with the US dollar...it's now gone down to 90 cents to a US dollar. used to trade at par some six months ago.

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Howa Showa kuch naheen :nahi: Main nay ghalti say kuch Dollar Jama kar liye thay Jiss key wajah say Dollar par bura waqat aa gia :hinna:

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Are we content with rejoicing on looking at pretty numbers on the screen? ($1 = Rs.97.50 looks better than $1 = Rs. 106) Or is there some tangible effect of this dollar decline? Dollar has slid about 10%, and crude oil slid about 4% over the past week. Does this mean we will be looking at something like a Rs. 10 decline in the price of petrol at the pump? How about prices of other imported items?

You answered half the question in your post. $1.5 billion was pumped in. That was about 60% of Pakistan's remaining reserves. If your reserves suddenly go up by 60%,, it doesnt take a rocket scientist to figure out that the exchange rate will improve as well. But the main question is by the people on the street. Not by the people trading in the stock market, or forex market. People on the street wonder if this will reverse the price increases they experienced during the past 8 months? Answer is, not by this much. Pakistan still has not experienced any increase in revenue generation from the manufacturing sector. They are still relying on making money by taxing the lower class.

Rupee decline 8 months ago was because of massive money printing by the SBP...and this rise is because of massive rupee buying, thanks to 1.5 billion influx, combined with increased remunerations from overseas. Pakistan does not have a sizable trade relationship with the US to be impacted by an internationally declining US currency.

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Is this payment for dirty work in Syria??

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.
recently jin mehmano ki ziyafat ki hai, kch tou mehrbani kr k gye hon gay ;)

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Reavealed: It was Saudi Arabia that loaned Pakistan $1.5 billion to shore up reserves – The Express Tribune

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Let us start from this: Nepra approves Rs2.24 increase in power tariff

Dollar regained some of its value today and crossed 100-mark ratio against the rupee again.

The news which Ali quoted in post#7 also reveals that Pakistan has received only half of the fund which Riyadh agreed to help Pakistan. So another $1.5 billion amount is in the pipeline. It means that the see-saw trend in dollar-rupee parity will continue for the time being.

As far as relief for the common man is concerned, it maybe a bit too early to judge the impact of a rejuvenated rupee on the inflation, but if history is anything to go by, I don’t see any noticeable price decrease forthcoming in essential commodities.

Another mystifying development which does not seem to be making any headline is the continuous surge of the Pakistani stock market. With no meaningful business activity going on in the country, the surge of the KSE should raise a legitimate question if the market is being ballooned artificially? If it is only a matter of time that the market will plunge and investors will lose billions or their investment in any single day?

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If this money is what made difference then why is government not acknowledging it? Why is it hiding this deal?
And if this money did not make the difference then why is government not denying these rumors?

It is also being said that Saudis made some payment to Pakistan for doing their work in Syria.

There is definitely something fishy going on here. The macro economic indicators have not changed and yet there is this sudden rise in rupee value with no reason being given by the government.

May people accuse Musharraf of building economy by selling the country to the US. I wonder if they will say the same thing about this Taliban-nawaz government which has sold Pakistan to the Wahhabi kingdom.

http://www.brecorder.com/br-research/44:miscellaneous/4202:will-rupee-appreciation-last/
The prime reason for rupee to revert back sharply in the last week is the building up of SBP reserves which are up from the low of $2.84 billion to $3.92 billion in a span of three weeks. Some of the flows like CSF money were well anticipated but the market was surprised by around $700 million jump in reserves in the third week of February. That is probably due to $750 million in aid coming from Saudi Arabia for some military related supports to the Kingdom.

That has changed the sentiments–punters, traders and treasurers are expecting reserves to build up further on account of some negotiations going on with KSA and some GCC countries for deferred oil payments. The government has almost finalized a deal with KSA for six months deferred oil payments for a period of three years, similar deals are envisaged with Kuwait and the UAE.

Together, these measures can give a cushion of over $5 billion in imports payment in next six months and that can be continued for three years. Even, only with Saudis we can save $400-500 million per month in oil import payments for six months and forex reserves to be up by same amount. No wonders, the SBP expects its reserves to reach by $4.7 billion by April end and $6.7 billion by June end (See BR Research article Whats behind rupee appreciation?" published on Feb 18).

If Taliban-Nawaz government is building this castle based on deferred oil payments for a few years then it means that this is nothing but political game play by the government. Pakistan would have to make oil payments at some point of time.

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The cat is showing its face out of the bag.

It WAS Saudi. Question is: At what cost, Pakistan? What were the terms?

Saudi Arabia loaned Pakistan $1.5bn to shore up economy - DAWN.COM

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When the US does it we all praise Musharraf. When Nawaz Sharif does it for Arabs we question it.

People have serious issues regarding skin color and ethnicity.

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The same terms the US set. After all that is what fixed our economy didn’t it.

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Musharraf did the same thing. What is good for the corrupt dictator who ruined the country is good enough for the democratically elected government.

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I have no problem with it as long as the new development is based on sound economic fundamentals instead of 'friendly injections'.

I hope government will build on the help it received from its friends.

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It wasn't the case in 2001. I doubt it is now. Its an injection of funds. That is exactly what the US did for 10 years. It didn't make a single difference. The same structural problems still exist and will continue to exist unless we decouple the economic oligarchy from the political process.

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If 'friendly injections' did not work in Musharraf's era, will they do any good now?

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Musharraf did it for the right cause. He altered the disastrous course which Taliban-Nawaz government had set for Pakistan. He moved Pakistan away from Saudi Wahhabi influence. This Wahhabi influence is what made Pakistan create Taliban in the first place, recognize their barbaric shariat in the name of Islam, and gave them opportunity to nurture terrorists from around the world.

But with accepting aid from the the Wahhabi, sectarian, and most regressive regime, Nawaz is undoing all the ideological gains Pakistan made after Musharraf. Pakistan is willing to involve itself in a civil war in a far-away Muslim country, which is bound to damage Pakistan's relations with Iran. So Nawaz's Wahhabi friends will ensure to make enemy out of Iran for us.
This will also increase Wahhabi influence in the country. It is going to delight the religious morons in the country like JI, JUI, and Taliban.

All in all, falling in Saudi Wahhabi influence is a step backward for Pakistan. On the other hand, Musharraf had done the right thing by working with US to move Pakistan away from supporting Taliban and Wahhabiyat in the country.

Anyway. Even if one does not see the difference between Musharraf and Nawaz in this case, they should at least accuse Nawaz the same way as they do with Musharraf. Nawaz should also be called the one who is selling off Pakistan. Otherwise it would be hypocrisy.

And it is laughable to call Musharraf "corrupt" instead of saying that Amirul Munafiqeen Nawaz Talibani.

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It is not about skin color and ethnicity. You are TOTALLY off. It is the same pathetic argument used by Taliban lovers when they say that people oppose Taliban for their being Pashtun.
This argument only shows the shallow minds of people who make these arguments.

Accepting US aid for stopping Pakistan's support to khawarij is better than accepting Saudi aid to promote Wahhabism and sectarianism in Pakistan and do Saudi bidding around the world.

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If we take out the element of dictatorship from the Musharraf regime and judge it purely on performance grounds, I am afraid our democratic leaders would be found trailing badly.

But then dictatorship is not the way forward. It may accelerate economic growth better and faster, but the overall aura created by it generally does not happen to be sustainable. Democracy is slow and flawed, but it does produce sustainable results.

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I second that :clap: