Foreign Currency Deposits and International Liquidity Shortages in Pakistan

This paper studies the implications of foreign currency deposits (FCDs) for international liquidity shortages in Pakistan. The analysis focuses on how the large volume of FCDs and the specific institutional characteristics of those deposits have made the Pakistan economy highly vulnerable to exogenous shocks. The analysis shows that FCDs created another channel for government borrowing, and fiscal sustainability in a “closed” system may be very different from sustainability in a more “open” system. There is a need to think of these issues in terms of total balance sheet vulnerability, and we recommend measures that would make domestic-currency-denominated assets attractive to investors.Capital Account Liberalisation, Financial Development, Dollarisation

The Impact of Institutional Credit on Agricultural Production in Pakistan

Three main factors that contribute to agricultural growth are the increased use of agricultural inputs, technological change and technical efficiency. Technological change is the result of research and development efforts, while technical efficiency with which new technology is adopted and used more rationally is affected by the flow of information, better infrastructure, availability of funds and farmers’ managerial capabilities. Higher use and better mix of inputs also requires funds at the disposal of farmers. These funds could come either from farmers’ own savings or through borrowings. In less developed countries like Pakistan where savings are negligible especially among the small farmers, agricultural credit appears to be an essential input along with modern technology for higher productivity.

The Impact of Institutional Credit on Agricultural Production in Pakistan

Agricultural credit plays an important role in enhancing the agricultural productivity in developing countries like Pakistan. The study discusses various indicators of agricultural credit in Pakistan and presents results of estimated production function using institutional credit as one of the explanatory variables. Over the years, increased percentage of agricultural GDP has been disbursed as institutional credit. During the study period disbursement of institutional credit per cropped hectare also depicted an increasing trend in nominal terms. However, it declined in real terms from late 1980’s to early 1990s. Zarai Taraqiati Bank Limited (ZTBL)-- formerly known as Agricultural Development Bank of Pakistan (ADBP), provides the major share of institutional credit. The share of production loans in total loan advanced has been increasing during 1980-81 to 1986-87 and after mid 1990’s. It shows multiple shifts in credit policy from loans for fixed capital to advances for operational capital during the study period. The OLS estimates of the production function revealed that institutional credit affects agricultural production positively. Water availability at the farm gate, labor, and cropping intensity are the other important variables that affect agricultural output positively. However, the shocks like floods, cotton leaf curl virus (CLCV), and drought have caused significant decline in agricultural output during certain years.institutional credit; agricultural production; production function

Foreign Currency Deposits and International Liquidity Shortages in Pakistan

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper studies the implications of foreign currency deposits (FCDs) for international liquidity shortages in Pakistan. The analysis focuses on how the large volume of FCDs and the specific institutional characteristics of those deposits have made the Pakistan economy highly vulnerable to exogenous shocks. The analysis shows that FCDs created another channel for government borrowing, and fiscal sustainability in a “closed” system may be very different from sustainability in a more “open” system. There is a need to think of these issues in terms of total balance sheet vulnerability, and we recommend measures that would make domestic-currency-denominated assets attractive to investors. JEL Classification Numbers: E52; F41 Keywords: Capital Account Liberalization, Financial Development, Dollarizatio

An Introduction to Islamic Finance: Theory and Practice -2/E.

Islamic finance has experience remarkable growth over the last three decades and the global demand for financial product and services that comply with economic and financial principles of Islam is increasing day by day, for newcomers to this burgeoning market, An Introduction to Islamic Finance : Theory and Practice offer an excellent overview of the principal concept from two leading scholar in Islamic finance. In the wake of the recent financial crisis, An Introduction to Islamic Finance offer a comprehensive and practical guide for anyone seriously interested in understanding the Islamic finance alternative and the enermous potential it holds

An Econometric Analysis of Foreign Direct Investment and Economic Growth of Pakistan

The aim of this paper is to empirically analyze the economic growth of Pakistan during time period 1960-2012. The data is taken from various sources WDI (World Development Indicators), IFS (International Financial Statistics) and Handbook of statistics on Pakistan economy-2005. The gross domestic product (GDP) is taken as dependent variable while foreign direct investment (FDI), Import (IM), Export (EX), Inflation (INF), Exchange rate (EXCR) and gross fixed capital formation (GFCF) are used as independent variables. The methodology to test relationship among these variables is co integration technique after unit root analysis. The unit root analysis show that all variables except inflation are non-stationary at level but becomes stationary at first difference. The results of co integration analysis show that all seven variables have a long run relationship. After this, least square regression was applied on first difference and found that however regression is overall significant but there is problem of multicollinearity. Therefore we don’t rely on this regression for their significance and also their co efficient sign. Keywords: GDP, FDI, EXPORTS, PAKISTA

The optimal solution for unit commitment problem using binary hybrid grey wolf optimizer

The aim of this work is to solve the unit commitment (UC) problem in power systems by calculating minimum production cost for the power generation and finding the best distribution of the generation among the units (units scheduling) using binary grey wolf optimizer based on particle swarm optimization (BGWOPSO) algorithm. The minimum production cost calculating is based on using the quadratic programming method and represents the global solution that must be arriving by the BGWOPSO algorithm then appearing units status (on or off). The suggested method was applied on “39 bus IEEE test systems”, the simulation results show the effectiveness of the suggested method over other algorithms in terms of minimizing of production cost and suggesting excellent scheduling of units

A flexible mixed-optimization with H∞ control for coupled twin rotor MIMO system based on the method of inequality (MOI)- An Experimental Study

This article introduces a cutting-edge H∞ model-based control method for uncertain Multi Input Multi Output (MIMO) systems, specifically focusing on UAVs, through a flexible mixed-optimization framework using the Method of Inequality (MOI). The proposed approach adaptively addresses crucial challenges such as unmodeled dynamics, noise interference, and parameter variations. Central to the design is a two-step controller development process. The first step involves Nonlinear Dynamic Inversion (NDI) and system decoupling for simplification, while the second step integrates H∞ control with MOI for optimal response tuning. This strategy is distinguished by its adaptability and focus on balancing robust stability and performance, effectively managing the intricate cross-coupling dynamics in UAV systems. The effectiveness of the proposed approach is validated through simulations conducted in MATLAB/Simulink environment. Results demonstrated the efficiency of the proposed robust control approach as evidenced by reduced steady-state error, diminished overshoot, and faster system response times, thus significantly outperforming traditional control methods