Wo wo wo....Today dollar reached at its all time peak at 109.50 (infact every single day its touching new peaks)... yesterday it was at 108.40... It is being widely speculated that by end of 2013 dollar will be equal to 125+.
My question to experts that is it currently advised (for at least 2 to 3 months further till dollar settled steadily) to sale out dollars for buying property for investment purposes only??
It’s really bad for the poor people of Pakistan. The price of every necessity would increase substantially. Surely rich people will gain much & it is advised for them to keep the US Dollars in hand rather investing somewhere else.
Yes I am worried too much for the middle class and lower classes of our country who live hand to mouth with the monthly earnings... We on the other hand living abroad are not much effected with this but the thing is that income in-equality and mafia'ism in our homeland is alarmingly increasing day by day... And this recent dollar up hike has covert & silent backing from our govt., resulting from secret IMF deal. Otherwise any govt. Would surely jump in to counter its currency crash... It is crystal clear.
Dilemma of our nation is as simple as a budget of one family. A family has a total income of 50,000 rupees per month and they don't want to reduce its expenses down from 100,000 then what will happen??? they have to take interest full loans every month from somewhere, and by the time for returning this "sood" they will keep on taking further interest full loans as they again really don't want to reduce their expenses. This is the simple reflective story of our country. Some might disagree but I don't see any big difference between.
Rupee is under pressure because there is an IMF loan repayment of $140 million due on 27th September. I dont think rupee will fall to 125 by end of 2013, but 110-113 range seems possible. All countries around the world are allowing their currencies to depreciate to protect their trade interests. Indian rupee has fallen by almost 20% against the dollar this year. Pakistani Rupee has fallen by 9%. Some adjustment in rupee value was due so lets not be panicked.
If you are thinking of converting dollar to rupees for investment, you should keep an annual return of atleast 11% in mind to conserve the value of your investment. Anything above that will be your profit.
The Rupee will fall but towards the end of the year it will start stabilizing when loan payments have been made and tranches of new loans are no longer used for previous repayment obligations. Then it is expected to remain stable for 1-2 years inshaAllah. Next year will be better inshaAllah.
@ Syed Amjad
So every time when there is loan repayment (as we taking more loans to return the older loans) rupee will be under pressure, so how you going to control this thing. The other side of the picture is not too much hopeful in the current near future i.e. Law and order situation, foreign investments have been declined to all time low due to this, energy shortages, fuel crisis, corruption & increasing inflation, situation in Karachi specifically... Without improving in all of these problems that we are facing I don't see any significant improvement in reducing our current account deficits and to get a right path of economic improvements.
Of course being Pakistani we all pray and hope for the best of our country, but situation on the ground currently doesn't seem too much good.
@ Syed Amjad
So every time when there is loan repayment (as we taking more loans to return the older loans) rupee will be under pressure, so how you going to control this thing. The other side of the picture is not too much hopeful in the current near future i.e. Law and order situation, foreign investments have been declined to all time low due to this, energy shortages, fuel crisis, corruption & increasing inflation, situation in Karachi specifically... Without improving in all of these problems that we are facing I don't see any significant improvement in reducing our current account deficits and to get a right path of economic improvements.
Of course being Pakistani we all pray and hope for the best of our country, but situation on the ground currently doesn't seem too much good.
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Any chance of pkr rate going to 200 by dec? what do people think? would it be worth converting dollar to rupees and then sell when rupees improve next year some time?
Sheikh sb there are forecasts for the rupee to breach 200 against the Pound by Dec 2014, but not the dollar...there is no chance of that happening.
@Shoaib. I know the situation looks grim, specially if you are looking at things from overseas, but things will start to improve within a few months (economically). There are good forex inflows expected from a number of sources so the rupee will gradually stabilize. Most of the foreign investment we were getting wasnt positive for the economy, so its good that the speculators have fled. Good quality foreign investment will soon be visible.
The IMF has given the government a time window to clean up the economic mess created by years of mismanagment. In the short-term, yes it will be painful. Consider it like a surgery, its never a pleasant experience, but its benefits are longterm.
@ SyedAmjad
May it be totally true what you said above...! but the thing with this continuous depreciation of already very weak currency, there will be a typhoon of uncontrollable inflation... And the majority of this country's middle class public will be victimized!
Current situation just broke the back bone of middle class and lower class of our country. Its really very disappointing.
Yes this is very disappointing… Rather than spending in a non-sense way by giving lollypops of laptops and loans to people. Govt should spend efforts by investing in energy sector and improve economy…
Anyways I apologise to shift my discussion to a political blend. Lets come back to the original point… What should be the smart move for investors right now ???
I just had a discussion with one of Banker and according to his assessment dollar will reach soon to 130 and then stable.Rest Allah knows better. This is not good for Pakistan and anyone hold’s PKR.
Yes for sure it is not good for everone
@ Syed Amjad… You r saying that things would start to improve within a few months (economically). How could you say like that when $7 billion loan has been taken by the Govt… So u r expecting that country will improve economically from LOAN. What about the returning loan with INTEREST. Don’t forget to add the previous loans in addition to the $7 billion, and corruption.
That is a very sad news, Dollar is rising, but Pound and Euro also are not idle, Pound reached 172.50 today.
Indian rupee rose up to 67-68 rupees, then they made some changes and brought back to 61 rupees. Why cannot our people do this??? Is mr. Dar is economic expert ?? All kind of favorism is going on in Govt … Favorism has damaged the Pakistan … Relatives and friends come first instead of following a process to bring up the right people on merit. For example, if we think that the relative or friend would mind or get anger, so what… On the day of judgement we have to answer to ALLAH that HE gave us authority to make decision based on merit but we inclined towards favorism, and suppressed the rights of the other person.
I remember posting an advice some time ago with some straightforward calculations to show why it didnt make any sense to keep one's savings in rupees, and to keep it in an FX account instead, even if you dont want to earn any profit from the bank. If anyone took that advice, they would have surely avoided this latest onslaught.
@Younus. You are in principle correct. Mr Ishaq Dar is a chartered accountant, but not an economist. However, regarding the Indian Rupee, even after they pulled it back to 61, it was down almost 20% against the dollar within 2 months! I have a strong suspicion that at some point, our govt will do something similar. Mr Dar played this trick in 1998 to punish speculators by first letting rupee fall to 66, then pulled it back to 59. Will he do it again? Lets see.