AVN 47.23 Decreased By ▼ -2.70 (-5.41%)
BAFL 29.58 Decreased By ▼ -0.24 (-0.8%)
BOP 3.68 Decreased By ▼ -0.04 (-1.08%)
CNERGY 3.20 Decreased By ▼ -0.14 (-4.19%)
DFML 9.99 Decreased By ▼ -0.27 (-2.63%)
DGKC 47.69 Increased By ▲ 1.04 (2.23%)
EPCL 43.29 Decreased By ▼ -0.35 (-0.8%)
FCCL 11.87 Increased By ▲ 0.09 (0.76%)
FFL 5.81 Decreased By ▼ -0.17 (-2.84%)
FLYNG 5.61 Decreased By ▼ -0.09 (-1.58%)
GGL 9.80 Decreased By ▼ -0.09 (-0.91%)
HUBC 67.87 Increased By ▲ 0.19 (0.28%)
HUMNL 5.65 Decreased By ▼ -0.10 (-1.74%)
KAPCO 22.10 Decreased By ▼ -0.07 (-0.32%)
KEL 1.79 Decreased By ▼ -0.02 (-1.1%)
LOTCHEM 27.34 Increased By ▲ 0.33 (1.22%)
MLCF 27.84 Increased By ▲ 1.36 (5.14%)
NETSOL 70.33 Decreased By ▼ -2.28 (-3.14%)
OGDC 74.11 Decreased By ▼ -1.49 (-1.97%)
PAEL 9.61 Increased By ▲ 0.02 (0.21%)
PIBTL 3.86 Decreased By ▼ -0.05 (-1.28%)
PPL 56.82 Decreased By ▼ -1.78 (-3.04%)
PRL 13.96 Decreased By ▼ -0.18 (-1.27%)
SILK 1.03 Decreased By ▼ -0.02 (-1.9%)
SNGP 40.85 Decreased By ▼ -0.57 (-1.38%)
TELE 6.37 Decreased By ▼ -0.33 (-4.93%)
TPLP 11.67 Decreased By ▼ -0.63 (-5.12%)
TRG 90.20 Decreased By ▼ -2.43 (-2.62%)
UNITY 12.36 Increased By ▲ 0.16 (1.31%)
WTL 1.10 Decreased By ▼ -0.01 (-0.9%)
BR100 4,098 Decreased By -16.1 (-0.39%)
BR30 13,852 Decreased By -122.9 (-0.88%)
KSE100 40,965 Decreased By -65.1 (-0.16%)
KSE30 14,532 Decreased By -43.8 (-0.3%)
Follow us

KARACHI: The Monetary Policy Committee of the State Bank of Pakistan (SBP) will meet on Tuesday, April 04, 2023 at SBP Karachi to decide about the Monetary Policy.

In the previous emergent meeting held on March 2, the committees increased the policy rate by 300 basis points to 20 percent on a higher inflation outlook.

As the inflation is still increasing, analysts are expecting further monetary tightening in the upcoming Monetary Policy Statement (MPS) to control the inflation. The market is expecting some 100-150 bps surge in the key policy rate.

Further hike in policy rate on the cards as inflation runs deep in Pakistan

The cut-off yield of short term government papers in the recent auctions has already rose to 21.99 percent.

The government is also making all efforts to secure progress on the ongoing IMF program, which has not shown much progress on its 9th review pending since Nov-2022.

Reuters adds: Central bank looks set to raise its key interest rate

by 200 basis points to a record high of 22% at its review on April 4, as it struggles to bring down stubborn inflation, the median estimate in a Reuters Poll showed.

Eighteen out of 20 economists and market watchers surveyed said the central bank would hike rates, with 12 of them predicting a 200 bps increase. Four poll participants saw the benchmark raised by 100 bps, while two forecast a 150 bps hike. Two respondents expected rates to remain unchanged.

Worldwide growth in consumer prices has compounded high inflation in Pakistan caused by a weakening currency, energy tariff increases and elevated food prices due to Ramadan. The latest consumer price-based inflation clocked a 31.5% rise on year in February, the highest in nearly 50 years.

Food, beverage, and transportation prices have all surged more than 45% and the country is in talks with the IMF to unlock its next tranche worth around $1.1 billion as part of a $6.5 billion bailout agreement reached in 2019.

On March 2, the State Bank of Pakistan (SBP) raised its key rate by 300 basis points to 20%, exceeding market expectations, likely to meet a key requirement of the International Monetary Fund for release of its pending bailout funds.

“The CPI is expected to be 34-36% due to hike in food prices in Ramadan. The weekly sensitive price index is also at an all time high of 47%,” said Saad Habib, head of equities at Al Habib Capital Markets, a brokerage firm in Karachi. The State Bank of Pakistan has raised rates by a total 10.25% since January 2022.

Shivaan Tandon, an economist at Capital Economics, expects inflation to rise further in coming months as a weaker currency, higher taxes and shortages of key goods continue to exert upward pressure on prices.

“Policymakers will also be keen to impress the IMF, by displaying their commitment to towards containing inflation, to secure a much-needed funding to mitigate the risk of default,” he added.

Some economists, however, felt with the last hike delivered just about a month ago, the central bank may prefer to wait to see the impact of the rate hikes on the economy before tightening further.

Copyright Business Recorder, 2023


1000 characters
Muhammad Adil Apr 01, 2023 07:51am
My estimate SBP will raise it by 250bps to 300 bps.
thumb_up Recommended (0) reply Reply
Tulukan Mairandi Apr 01, 2023 09:46am
Soon we will be at 80% inflation. At which point, it will be impossible to stop Another Zimbabwe in the making witb death, misery, terrorism and total collapse is on the horizon.
thumb_up Recommended (0) reply Reply
Abdulrehman Haroon Apr 01, 2023 01:25pm
20,30,40%. Who cares? For most of us, these are just numbers; who do banks lend to anyway? Not to any small businesses I have ever known.
thumb_up Recommended (0) reply Reply

SBP seen raising key rate to record 22pc as inflation bites

Govt to share budget details with IMF to unlock funds: Dar

IK urges SC to ‘save democracy’

IK ‘reveals’ Rana’s ‘plot’

Cabinet may ratify deal between UPL, govt entities

Accumulated profits: Proposed advance tax may be challenged in courts

Transportation of HSD: APL proposes to repurpose its Hub-ZOT pipeline

Republicans, Biden reach debt ceiling deal

SRO on ‘records of beneficial owners’ irks PBC

PBS statement full of mistakes: economist

WB terms one component of KWSSIP ‘high risk’