Do you remember an old adage:
‘ye cheez to Takkay ki nahiN hai’ (This thing is not worth a Takka).
Well, today the tables have turned. What was once true of BD Takka is now true for a Pakistani Rupee. As of today 1 Bangladeshi Takka equals 1.14 Pakistani Rupees . The phenomenal slide of Pakistani Rupee, which started around January 2008 continues unabated. Pakistani rupee is now trading at very close to 80 Rupees to a US dollar. Yahoo Finance was quoting Pakistani rupee at Rs 78.375 to a US dollar on October 6, 2008.
We also had a post on this topic back in May 25, 2008 when Rupee had slid down to Rs 68 for a dollar but this time slide in Rupee’s value seems like the steepest in history of Pakistan. Rupee has lost almost one third of its value in the past 10 months.
The question that everyone is asking is whether current Government is capable of controlling this situation or is it beyond anybody’s control.
Pakistan’s finance Minister (since May 12, 2008) is Mr. Naveed Qamar and atleast I’ve not heard anything from him about what are Government’s plans to bolster Rupee’s value or to stop fast depleting foreign exchange reserves of Pakistan (now down to approx $8.1 bn).
What is happening to a common person among all this turmoil is depicted well in a sher by Anwar Masood.
“jo dil pe guzarti hai raqam karte raheN ge”
kal tum ko bata deN ge raqam kitni bani hai
Reference:
Banker,
It seems to me that you have not read my post with an open mind. Instead of responding to it and the points I raised, you seem to be simply determined to prove yourself right by mischaracterizing and dismissing what I have written by calling it “communist propaganda”.
It also appears that your agenda is to distract the readers from the current economic mess by blaming it on “Shortcut” Aziz and by claiming nothing good happened under him , just the labels you use are sufficient for a reader to see your bias.
If you like what you see now, then there is nothing any one can do to change your mind. I guess you and Kaiser Bengali would rather have “Mr. Ten Percent” and “Multani Joker” managing your economy that Musharraf or “Shortcut” Aziz.
There is none so blind as those who will not see.
as they say, little knowledge can be be a dangerous thing. they also say proof of pudding is in the eating and fool me once shame on you, fool me twice shame on me.
below is a graph of of pakistani rupee (pkr) since the start of 1990. in the decade of democracy leading up to musharraf’s rule, pkr/usd($) went from around 21 to 52 which translates into an annualised depreciation of 9.5% per annum. in comparison, under shaukat aziz/musharraf regime pkr went from 52 to about around 61 which amounts an annualised depreciation of about 2%. note that in the 1990s, pakistan’s external debt went from around $20bn to around $45bn including the frozen fcy reserves. in contrast under mush/s.a. external debt went from $35bn to around $41bn while reserves increased from $0.5 to $15bn at peak before the spike in oil prices.
http://img511.imageshack.us/my.php?image=pkrtl7.gi f
also the claim that exports did not increase under mush/s.a. regime is nonsensical as well. when musharraf came to power in 1999, pakistan’s exports amounted to around $8bn. in the next 9 years, pakistan’s export more than doubled to $17bn. essentially in 9 years of musharraf’s rule, pakistan exports increased by more than the increase in pakistan’s total exports for the prior 52 years.
going back to issue of pkr stability under musharraf’s rule, that was primarily due to reserve build up initially due to increase in exports and privatisation and later due to increase in foreign direct investment in sectors like banking and telecom. in comaprison, since the current govt has come to power, not only has fdi stopped, but also pakistani investors are sending their money abroad which is a perfectly rational course of action given the competence level of politicians as well as their track record.
as far as the future of pakistani economy, i see pain for a long time. my advice to people is to still convert their savings in $ and ship money abroad. in the short run, country will likely be bailed out by imf. that however will only delay the inevitable.
pakistanis voted for these clowns so they should be prepared to live with the consequences.
And people keep withdrawing their foreign exchange from Pakistan..!!
The so called educated pro-musharraf crowd has returned to the site (hint: they use a lot of capital letters in their posts) .
I hate it when people use posts to divert traffic to their blogs but rather than use this site to write a long post and crowd out others, I have written a post on my blog. Instead of explaining economics as I understand it, I have just used data and other reports to drive home the point that seeds of current crisis were sown in earlier regime.
Pssst: The data is actually from Citibank (Shaukat Aziz’s employer) and State Bank of Pakistan :)
http://financepakistan.wordpress.com/2008/10/09/sh ortcuts-short-legacy/
AFTER SEEING THE CURRENT ECONOMIC SITUATION AND THE FAILURE OF CORRUPT GOVERNMENT OF MR10%. THE ONLY THING COMES INTO MY MIND ARE THE LAST WORDS BY FORMER PRESIDENT PERVAIZ MUSHARAFF:
“PAKISTAN KA ALLAAH HAFIZ HAI ”
AND FOR ALL THOSE PEOPLE WHO BLAMING PAST GOVERNMENT FOR CURRENT ECONOMIC CRISIS BECAUSE AS PAKISTANIS ITS IN OUR NATURE TO BLAME SOMEONE ELSE FOR THE PROBLEM THAT CREATED BY OUR OWN…UNDER PRESIDENT MUSHARAFF RULE YOUR FOREIGN RESERVES REACHED TO $17 BILLION FROM ONLY 3 BILLION IN WHEN HE CAME INTO OFFICE…THE CURRENT PRESIDENT ASIF ZARDARI HAD MADE THE NATION BANKRUPT IN JUST 8 MONTHS….YOUR DOLLAR RATE KEPT AROUND 60 RUPPES FOR 8 YEARS, BUT BECAUSE OF THE MEHARBANIS OF YOUR CURRENT PRESIDENT ASIF ZARADRI SAHED IT HAS FALLEN TO RUPPES 80 IN 8 MONTHS!!! ONE MORE THING THAT I WANT TO ASK FROM PEOPLE OVER HERE AND ESPECIALLY FROM MR OWAIS MUGHAL WHERE THE HELL ARE YOUR BELOVED LAWYERS AND
MR CHEIF JUSTICE IFTEKHAR CHUDUDARY !!!! ARE THEY ALSO HAVING FUN WITH THE MONEY THAT THEY GOT FROM MR 10% WHO HAS BECOME NOW 100% PRESIDENT ASIF ZARDARI ….?