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Investor
( 168 posts )

[1267 Replies]
Pakistani rupee value is doing a nose dive and currency value has depreciated 30% compared to british pounds since 2017.

I bought 2 plots back in 2015 in bahria town. Even though the price of plots have gone up by 10% each year, the value of currency however depreciated and the investment is completely worthless.

Anyone seeing anything positive coming out of pakistan's economy in the next few years?

    914 days ago In Where to Buy
    Post Answer
    Imtiaz
    (2279 posts)
    Also to add,

    The USD had a sharp climb post Jun 2018.

    Also the taxes on RE transactions hit the actual gains

    USD has global liquidity, on spot, RE doesn't enjoy same privelege.

    *Not to advocate one above the other but some worthwhile considerations.
      24 days ago 

      Imran A.
      (115 posts)
      The way we are dying to join communist Russia & China, I am fearful now that free world will shut down their financial system on us and dollar will climb past even 2000 mark. But in that case even real estate become worthless. Recent changes in State Bank and on Tax collection front are indicating something is not right.

      We have many such examples like Iran, North Korea, Cuba, Venezuela......
        24 days ago 

        Imtiaz
        (2279 posts)
        Brother, unfortunate fact all over our history. We don't join Communism, Capitalism, Marxism, Socialism etc. We as a state have followed quick bucks, wherever they take us!

        The tragedy about chasing quick bucks, over least bit of principle is that you end up paying way more than you earned. Not a big deal, earning goes into few pockets, payback comes to the entire nation!


        This has happened, is happening, will happen!
          24 days ago 

          Isloo1
          (997 posts)
          Imran dear,

          So far we're behaving like good kids. Coze if we were a naughty boy, we would have been treated like Venezuela (1 USD to 1.2 million Boliver) or Iran (1 USD = 42,025 Irani Riyal).

          As all kids behave good under a "stick" so are we under FATF.

          Rupee decline was the doings of Arstoo of IMF made head of State Bank, who moved his magic wand to get some sizzling hot money at 13% rate encashed at 30% declined currency. Now that the sizzler is gone cold (as it does in a Chinese restaurant) so the policy rate and dollar both are coming down.





            24 days ago 

            Asad Cheema
            (14 posts)
            @isloo1 There is a simple economic reason for our devaluation and it is political meddling of our state bank. State bank ensures that inflation remains low and our currency remains stable but governments since the 2000s have been printing more and more money to cover their deficits which in turn increases inflation and devalues our currency. Now this practice has finally come to an end so natural devaluation and appreciation of currency will only take place if our foreign reserves go up or down.
              24 days ago 

              Imtiaz
              (2279 posts)
              Currency print out by state bank all organic now?


              If that's happening since 2000s what triggered the PKR in just 2 years that it's shed it's value by 45% - 50% in just 24 months ...

              In an import-driven system, you can never sustain/stabilise currency value for 2 decades by simply printing out the cash. It starts to meltdown even after completing 1 Fiscal Cycle.

              Also to mention, you cannot get GDP to rise, years on, just by printing the notes.
                24 days ago 

                Asad Cheema
                (14 posts)
                @imtiaz PMLN government (really just Ishaq Dar) believed in strong PKR policy so they artificially tried to uphold its value. I think reports have came out recently mentioning how billions of USD was spent by PMLN to keep PKR overvalued... State Bank was always of the view that PKR should be determine by free market rate and not any political meddling. When PTI government came in, they had similar views so PKR came to its natural position and now it is free market rate.



                Now whether PKR appreciates or depreciates depends on foreign reserves as well as export/import ratio.
                  23 days ago 

                  Imtiaz
                  (2279 posts)
                  Brother I dont deny that PKR havent been manipulated or its value being adjusted, whichever Govt came in. I am simply pointing to a blanket statement that 'since 2000s, more printing was among one factors to keep it artificial.'


                  For the record, till date SBP has no autonomy. Though IMF is in demand to do that to comply for next tranche of the loan.

                  SBP to be made autonomous in line with IMF terms
                  https://www.dawn.com/news/1611663


                  I am not sure if Free Market shakes PKR from 115 to 165+ and back to 152 in a frame of just 24 months. The Foreign Reserved were lowest in 2013 since 2000 but PKR stood at 100-104 range

                  The Disaster in Fiscal/Monetary/Economic Policy has ousted 2 Fin. Ministers in 2 years and no one willing, as of now to be the next scapegoat. This is where the facts stand.
                    23 days ago 

                    Analytical I..
                    (5 posts)
                    As an outside observer with expertise in credit markets (read: risk obsessed). I'm actually cautiously optimistic about Pakistan. It feels like we have finally managed to get some momentum on not actively self-sabotaging ourselves. We just need to get some of the reforms through and tie future Govts in them so the playground rules change.



                    As for China, I don't think people truly appreciate that they are literally watching the emergence of a superpower. You hear these things but the true scale is hard to appreciate unless you are in the markets. Competition in that space is fantastic, though of course there will some conflict. This time superpower happens to be our neighbour and we are on friendly terms with them. They are also extremely competent and strategic in how they execute. No free deals from the Chinese but that is hardly unfair.
                      23 days ago 

                      Imran A.
                      (115 posts)
                      Even China central bank manipulates their currency against USD, they even use commercial banks to pump dollars in and out to keep currency at a desired level.

                      As far PMLN, it was money well spent to keep USD around 100, because it kept prices of essential commodities and utilities stable and protected the common Pakistanis. That is why people of Pakistan were more confident in their economy during PMLN tenure.

                      I never voted for PMLN in my life but have to admitt that Nawaz was the best PM and Ishaq Dar was the best FM anyone can ask for.


                      Their fault = they refused to bow down to a group who only wants to fill their pockets and refuse to let Pakistani awam have any control over the future of their motherland.
                        22 days ago 

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