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Indo – US nexus trying to disturb nuclear balance between India and Pakistan and my suggestion.

The regional discriminatory approach by which India would be able to secure huge reserves of stockpiles under the Indo-US deal putting strategic stability of south Asia in disorder. Currently India possesses 500 kg plutonium and 11.5 metric tons of reactor grade plutonium in spent fuel. According to estimates India would be able to increase its nuclear arsenal from 100 warheads currently to 300-400 warheads in the next five years. Indian technological advancement in the conventional and nuclear field will bring qualitative and quantitative transformation in the Indian Military and impinge upon Pakistan’s national security interests.

By Shakir Baacha. The Frontier Post.

My solution:

Pakistan must move immediately towards producing hydrogen and neutron bombs, as it can’t go on just matching atom bomb with every Indian atom bomb.

Outstanding Coincidence of Words

Hate has 4 letters
so does Love………….

Enemies has 7 letters
so does Friends……..

Lying has 5
so does Truth………………..

Negative has 8
so does Positive…….

Under has 5
so does Above………………..

Cry has 3 letters
so does Joy……….

Anger has 5 letters
so does Happy…….

Right has 5 letters
so does Wrong…….

Are they by Coincidences??????

It means Life is like a Double edged Sword,
We should choose the BETTER SIDE OF LIFE……!!

How to get billions of USD easily, cheaply and quickly for Pakistan?

H’able Mian Muhammad Nawaz Sharif Sahab,

AoA.

As per latest reports of media today Pakistan’s total foreign exchange reserves have fallen below $10 billion to $9,92 billion; with SBP having only $4.6 billion and commercial banks $5.32 billion.

Considering the country’s precarious level of foreign exchange reserves, it is suggested that the MOF may be directed to adopt the following scheme (with suitable amendments as Pakistan’s requirement) launched by India, to enhance its foreign exchange reserves, basically to control the fast depreciating Indian Rupee, which has now come back from IR 68 to a dollar to IR 61.44 to a dollar.

Further, India expects gathering additional $30 billion with this scheme, detailed at below.

MUMBAI: Reserve Bank of India governor Raghuram Rajan’s doubling of borrowing limits for banks and the easier norms to tap non-resident bonds may draw as much as $30 billion in the next three months, providing a much needed breather to fix the currency.

Private banks such as ICICIBSE -0.79 %, Axis and even the State Bank of IndiaBSE -0.42 % may be among the lenders which may use the window opened by the new governor to raise US dollars by bond sales which could fetch as much as $20 billion, said analysts. No bank has declared its intention to use the window so far. Rajan’s offer to hedge foreign exchange deposits of the banks at a fixed 3.5% for three years may lure another $10 billion, estimate economists.

“An enhancement in the overseas borrowings would mean additional borrowings possible for the banking sector in foreign currency,” said Mohan Shenoi, treasury head, Kotak Mahindra BankBSE -0.72 %, who had estimated that even if a quarter of it is used about $25 billion could flow into the country. Rajan, on Wednesday, moved to shore up the rupee which was among the worst-performing currencies in the world after foreign investors began to pull out funds as tapering of the quantitative easing in the US turned imminent.

Banks can now borrow up to 100% of their Tier I capital, from 50% forex-denominated FCNR B of three years and above at a fixed hedge cost of 3.5 %. The rupee gained 1.6% to 60.01. The special swap window for the so-called FCNR (B) deposits, probably to offset the US dollar sales to oil companies under a swap agreement, could lead to substantial flows as it did during previous such moves.

This should add about $10 billion to forex reserves and rein in rein expectations around current levels,” said Indranil Sen Gupta, economist, Bank of America Merrill Lynch. “This brings to fruition our standing call that the RBI would need to mobilize forex reserves by launching a NRI deposit scheme in which the rupee risk is borne by it or the government.”

During April-June there were net outflows of $101 million compared to an outflow of $696 million in the same period last year. The outstanding FCNR B deposit in the system is $15 billion, almost one-third of the NRE deposit. According to Sengupta, the cost of FCNRB deposit mobilisation will come to 8.5%. RBI has liberalised norms on NRI deposits to get inflows.

In April, it had exempted deposits under the scheme from the requirement of cash reserve ratio and statutory liquidity ratio. If banks lend at 11%, they will likely make the entire 250 basis points spread as FCNRB deposits will not attract CRR or SLR for now. The currency is expected to gain from the inflows. Similar schemes, like the 1998 Resurgent India Bonds and the 2001 India Millennium Deposits were effective in the past. They had raised $5 billion each.”

With best wishes and kind regards.

Syed Nayyar Uddin Ahmad

“Life can only be understood backwards, but it must be lived forward.”

— Soren Kierkegaard

The highest form of ignorance is when you reject something you don’t know anything about.

Height of economic mismanagement..!

The government of Pakistan finalised a deal on Sept 23 with a consortium of banks to arrange $625 million loan at an average rate of 5.3 per cent over London Interbank Offered Rate (LIBOR).

Considering that world over, one hardly gets 1% interest, over dollar deposits in banks, if the GOP had offered even 4% profit to the expatriate Pakistanis, it would have fetched foreign exchange many times over $625 million, that too on a much cheaper rates.

I am just astonished at the way the financial affairs of Pakistan are being run by the experts of the ministry of Finance.

However, one thing is certain, the previous PPP government is now looking much better than the current PMLN’s highly experienced rulers, especially in the financial affairs.

“You must have long range goals to keep you from being frustrated by short range failures.”

— Charles C. Noble

Love is a feeling of warm personal attachment.

“I have never met a person whose greatest need was anything other than real, unconditional love. You can find it in a simple act of kindness toward someone who needs help. There is no mistaking love…it is the common fiber of life, the flame that heats our soul, energizes our spirit and supplies passion to our lives.”

Elizabeth Kübler-Ross (1926-2004);
Psychiatrist

Mr. Ishaq Dar can you answer the questions raised below, or the nation should rue that moment, when PMLN was voted by the people to govern with its team of extremely incompetent and nincompoop finance managers.

Now there is hardly any doubt that PMLN has totally messed up the country’s economy. Needs any proof, just read the letter attached below, and decide for your self, the sheer incompetence of the government’s finance team.

A letter titled “Flight of capital” published by the daily Dawn on 4 October, 2013.

PAKISTAN’s rupee was at 100 to one US dollar on June 1 and today’s rate is hovering around Rs110 to one US dollar. This means we have a devaluation of 10 per cent in less than three months since this government came into power.

The unabated beating of our currency in the exchange market has very serious consequences. It is sharply resulting in hyper inflation, mainly because we are consuming imported goods worth around $4 billion a month, and the depreciating currency directly increases the cost of imports.

The daily increasing inflation is making lives of the people miserable. In a desperate effort to increase forex reserves and stop the currency falling over the cliff, the government finalised a deal on Sept 23 with a consortium of banks to arrange $625 million loan at an average rate of 5.3 per cent over London Interbank Offered Rate (LIBOR).

Instead of stabilising Pakistan’s rupee, this reported deal backfired and has spurred currency devaluation because clearly this deal has sent wrong message to forex market.

Even the stock market reacted very negatively, and the Karachi Stock Exchange lost more than 500 points on Sept 24. I think many economy watchers in and outside the country would be wondering why the government should show such an immense desperation to market by entering into such a forex loan at such a high interest rate as 5.3 per cent above LIBOR.

This government-bank consortium deal of $625 million loan appears to have been done in unnecessary desperation and haste without much economic homework.

I do not know if the following points were debated at length before making such a deal. What is the surety that such a deal will not lead to cannibalisation of dollar deposits?

How will such a deal increase reserves if banks of consortium transfer foreign holdings of residents to the SBP and earn higher profit of 5.3 per cent above LIBOR?

Will it not lead to more dollarisation of the economy when market senses so much desperation of the government that it enters into such a deal? Instead of making such deals, the government should take bold steps and make necessary structural reforms because the country’s economy is completely fractured.

EJAZ AHMAD MAGOON
Lahore