Pakistonomy - Episode 127 - The Return of Ishaq Dar
Pakistonomy
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Are Banks Borrowing From the Forward Market to Retire LCs?
The National Assembly was told that there are eight banks in particular who have been asked to explain transaction by transaction why they charged such high rates. So, you know I mean as that inquiry proceeds we look forward to finding out more about what really happened the bankers when I speak to them have their own point of view. They say that look we have to borrow from the forward market in order to arrange the funds necessary to retire these LCs and why would an LC for an oil import for example be settled at 242 when the interbank rate is 232? Simple because we had to buy borrow from the future at a loss because the forward market itself was yielding negative premiums at that time now that gets a
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