Great article on the devaluation of the Rupee here. All is not as bad as it seems! Give it a read!
13
May
08
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Presently, Pakistan is facing economic and financial crisis like:
• Political instability
• Higher food inflation
• Electricity shortage
• Terrorist attacks
• Devaluation of Pakistani Rupee
• Banking sector liquidity problem
All of these crises are affecting Pakistan’s macroeconomic variables like National
income, purchasing power of people, Unemployment, Balance of Payment
problem, security problem and many others.
Being a student of macroeconomics, analyze the whole situation of
Pakistan on the above mentioned grounds and then answer the following
questions in your own words.
1. What are the reasons behind this situation of Pakistan?
2. What measures have been taken by State Bank of Pakistan (SBP) to
solve the liquidity problem of banking sector?
3. What our Government has planned to get rid of this economic crisis?
4. What is the role of “Friends of Pakistan” Consortium to tackle the current
economic crisis of Pakistan?
5. What do you suggest to overcome these crises being a student of
Economics?
I need the answers of the above Q in details. plz reply me
Presently, Pakistan is facing economic and financial crisis like:
• Political instability
• Higher food inflation
• Electricity shortage
• Terrorist attacks
• Devaluation of Pakistani Rupee
• Banking sector liquidity problem
All of these crises are affecting Pakistan’s macroeconomic variables like National
income, purchasing power of people, Unemployment, Balance of Payment
problem, security problem and many others.
Being a student of macroeconomics, analyze the whole situation of
Pakistan on the above mentioned grounds and then answer the following
questions in your own words.
1. What are the reasons behind this situation of Pakistan?
2. What measures have been taken by State Bank of Pakistan (SBP) to
solve the liquidity problem of banking sector?
3. What our Government has planned to get rid of this economic crisis?
4. What is the role of “Friends of Pakistan” Consortium to tackle the current
economic crisis of Pakistan?
5. What do you suggest to overcome these crises being a student of
Economics?
In need the answers of thr above Q in detail.plz repl me
The Pakistan banking sector has been enjoying very sound liquidity with strong money reserves; during FY08 the demand for domestic credit sharply rose to 29.3 percent from last year 15.8 percent due to huge Government borrowings to meet deficits and private sector’s high credit demand; remained at 16.5 percent due to the high inflation crisis locally and commodity price bubble internationally; the SBP was operating a tight monetary policy to get down the inflation rate to single digit from 21.5 percent during FY08. The drying up of credit internationally has hit Pakistan hard with the banking system suffering a severe liquidity problem this year. Overnight call rates rose to high levels ranging from 32 to 40 percent, the liquidity shortage increased to the highest level of inter-bank rates during FY08 and State Bank of Pakistan took measures to support the banking sector by following ways:
- SBP has reduced the CRR to least 5 percent
- SBP injected 440 billion rupees to meet shortage of liquidity
- SBP facilitated the banks by discounted windows.
Without deregulating the internal monetary policy, SBP injected the 270 billion rupees in financial market to provide the liquidity support to banks which are fighting against financial crisis.
thanx and Allah Hafiz