ANL 10.60 Increased By ▲ 0.19 (1.83%)
ASC 9.32 Increased By ▲ 0.11 (1.19%)
ASL 11.90 Increased By ▲ 0.13 (1.1%)
AVN 80.66 Increased By ▲ 4.61 (6.06%)
BOP 5.55 Increased By ▲ 0.06 (1.09%)
CNERGY 5.50 Increased By ▲ 0.13 (2.42%)
FFL 6.75 Increased By ▲ 0.04 (0.6%)
FNEL 6.05 Increased By ▲ 0.12 (2.02%)
GGGL 11.43 Increased By ▲ 0.13 (1.15%)
GGL 16.88 Increased By ▲ 0.38 (2.3%)
GTECH 8.81 Increased By ▲ 0.28 (3.28%)
HUMNL 7.27 Increased By ▲ 0.05 (0.69%)
KEL 3.12 Increased By ▲ 0.25 (8.71%)
KOSM 3.15 Increased By ▲ 0.05 (1.61%)
MLCF 26.90 Increased By ▲ 0.91 (3.5%)
PACE 3.10 Decreased By ▼ -0.05 (-1.59%)
PIBTL 6.10 Increased By ▲ 0.06 (0.99%)
PRL 18.50 Increased By ▲ 0.35 (1.93%)
PTC 7.11 Increased By ▲ 0.10 (1.43%)
SILK 1.19 Increased By ▲ 0.02 (1.71%)
SNGP 34.05 Increased By ▲ 0.80 (2.41%)
TELE 11.40 Increased By ▲ 0.28 (2.52%)
TPL 9.54 Increased By ▲ 0.32 (3.47%)
TPLP 20.71 Increased By ▲ 0.54 (2.68%)
TREET 30.20 Increased By ▲ 1.50 (5.23%)
TRG 78.30 Increased By ▲ 2.55 (3.37%)
UNITY 20.55 Increased By ▲ 0.27 (1.33%)
WAVES 12.85 Increased By ▲ 0.25 (1.98%)
WTL 1.45 No Change ▼ 0.00 (0%)
YOUW 4.94 Increased By ▲ 0.19 (4%)
BR100 4,160 Increased By 76.4 (1.87%)
BR30 15,387 Increased By 402.4 (2.69%)
KSE100 41,879 Increased By 826.8 (2.01%)
KSE30 16,009 Increased By 346.4 (2.21%)
Business & Finance

MPC meeting: Majority polled expect major spike in policy rate

  • Many anticipate rate hike of 100 bps ahead of MPC meeting scheduled for May 23
Updated 17 May, 2022

A majority of market participants expect a major hike in the policy rate in the upcoming Monetary Policy Committee (MPC) meeting of the State Bank of Pakistan (SBP) scheduled for May 23, according to a poll conducted by brokerage house Arif Habib Limited (AHL).

The brokerage house, which itself expects the SBP to increase the policy rate by 100bps to 13.25%, conducted a poll in which it took feedback from various sectors - both financial and non-financial - on expectations over the Monetary Policy Statement (MPS).

Around 85% of respondents were of the view that the SBP will increase the policy rate in May 2022’s MPS while 15% expects interest rate to be held at the current rate of 12.25%.

Of the respondents expecting a hike, a majority (54%) are anticipating a rate hike of 100 bps, 15% expect a rate hike of 150 bps and 8% expect a rate hike of 50 bps. 4% anticipate a rate hike of 250 bps and 200 bps each.

At emergency MPC meeting, SBP raises policy rate by 250 basis points to 12.25%

AHL said the MPC meeting comes as the country battles high inflation, which has remained in the double digits since November last year, mainly on the back of an uptick in food and energy prices and the expected revival of the International Monetary Fund (IMF) programme, which would compel the government to roll back fiscal relief measures in order to get the fund's seventh review through.

7th review of EFF: IMF says will enquire over programme engagement with new govt

“This step of the government is most likely to further augment inflationary pressure hence SBP might want to act proactively and consider rate hike in the upcoming policy,” said AHL.

Last month, at an emergency meeting, the MPC decided to raise the policy rate by 250 basis points to 12.25% in a bid to tackle inflation and a widening current account deficit led by a high import bill. The comittee said at the time that the outlook for inflation has deteriorated and risks to external stability have risen.

“Externally, futures markets suggest that global commodity prices, including oil, are likely to remain elevated for longer... On the domestic front, the inflation out-turn in March surprised on the upside, with core inflation in both urban and rural areas also rising significantly,” MPC had said in a statement then.

Comments

Comments are closed.

Rauf Kadri May 19, 2022 08:50am
Traditional monetary policy theories do not work in Pakistan or for that matter in any country where inflation is totally supply driven and not demand driven. This means inflation is rising because there is low production capacity in the country and in simple words , too much money is chasing too few goods. Interest rate hikes will NOT curb inflation.
thumb_up Recommended (0)