10-25-2008, 04:56 PM
Dears,
I don't know where this crunch is going to take the nation.
Some one put a question to me which is really interesting and innocent. He asked, if the quantum of currency notes issued by State Bank and in circulation within the economy are same (without any redemption) then why there is a supposed liquidity crunch within the country. Why WAPDA is failing to pay over hundred billion rupees to IPPs causing historically worst power shortage problems. Why banks are hesitating to lend and why rumors are on air about expected collapse of banking sector. Further, if exports have not been banned why manufacturing sector is on last edge and why production activity is badly affected.
I tried to explain the macro economic situation theoretically and gave the apparent reasons as per my limited knowledge. However, I felt, the explanation did not bring the result.
Personally, I wonder the CFS equity financing (for badla transaction) in stock exchanges is not available even on 100% mark-up rate offers. The major stock brokers wish to fix such CFS rate at 24% which appears to be a joke in this situation. Hundred percent mark-up rate means a lot and if financing is not available even on this rate then God knows where this crunch will lead the nation to.
Regards,
KAMRAN.
