BAFL 38.50 Increased By ▲ 0.05 (0.13%)
BIPL 17.39 Increased By ▲ 0.14 (0.81%)
BOP 4.04 Decreased By ▼ -0.03 (-0.74%)
CNERGY 3.08 No Change ▼ 0.00 (0%)
DFML 16.53 Decreased By ▼ -0.02 (-0.12%)
DGKC 43.56 Decreased By ▼ -0.24 (-0.55%)
FABL 22.35 Increased By ▲ 0.05 (0.22%)
FCCL 11.35 Increased By ▲ 0.04 (0.35%)
FFL 6.56 Increased By ▲ 0.19 (2.98%)
GGL 9.42 Decreased By ▼ -0.07 (-0.74%)
HBL 89.86 Decreased By ▼ -0.64 (-0.71%)
HUBC 87.83 Increased By ▲ 0.13 (0.15%)
HUMNL 5.50 Increased By ▲ 0.01 (0.18%)
KEL 2.01 No Change ▼ 0.00 (0%)
LOTCHEM 28.67 Increased By ▲ 0.17 (0.6%)
MLCF 30.14 Decreased By ▼ -0.06 (-0.2%)
OGDC 97.25 Decreased By ▼ -0.95 (-0.97%)
PAEL 10.12 Increased By ▲ 0.13 (1.3%)
PIBTL 3.89 No Change ▼ 0.00 (0%)
PIOC 85.05 Decreased By ▼ -0.20 (-0.23%)
PPL 74.52 Decreased By ▼ -0.08 (-0.11%)
PRL 15.38 Increased By ▲ 0.06 (0.39%)
SILK 0.97 No Change ▼ 0.00 (0%)
SNGP 46.75 Decreased By ▼ -0.05 (-0.11%)
SSGC 9.25 Decreased By ▼ -0.11 (-1.18%)
TELE 6.80 Decreased By ▼ -0.16 (-2.3%)
TPLP 12.16 Decreased By ▼ -0.17 (-1.38%)
TRG 89.09 Decreased By ▼ -1.06 (-1.18%)
UNITY 25.45 Increased By ▲ 0.06 (0.24%)
WTL 1.15 Increased By ▲ 0.01 (0.88%)
BR100 4,636 Decreased By -20.1 (-0.43%)
BR30 16,614 Decreased By -49.4 (-0.3%)
KSE100 46,312 Decreased By -53.5 (-0.12%)
KSE30 16,016 Decreased By -155.9 (-0.96%)

KARACHI: Central bank is widely expected to keep its key interest rate unchanged at 21% on Monday after aggressive rate hikes since April last year to tackle record high inflation amid the nation’s worst-ever economic crisis.

The country’s key rate has been raised by a massive 1125 basis points (bps) since April 2022 and 17 of 18 analysts surveyed said there would be no change in the key rate on Monday, while one expects a 100 bps hike.

“They’ll point to a ‘plateauing of inflation’ as evidence that rates don’t need to go up,” said Uzair Younus, Director of the Pakistan Initiative at the Atlantic Council’s South Asia Center.

MPC to meet on 12th

Most analysts agreed that with inflation peaking and global commodity prices coming down, there was no urgent need to hike interest rates yet again.

Inflation surged to 37.97% in May, a record high for a second month in a row, and the highest in South Asia, ahead of Sri Lanka, which posted annual inflation of 25.2% in May.

“The inflation readings are expected to fall due to high base effect,” said Fahad Rauf, head of research at Ismail Iqbal Securities.

“We expect 30% inflation for June 2023 vs 38% in May. GDP growth was meager 0.3%, which would probably be revised to negative once the final/revised GDP numbers are released next year,” he added.

But Shivaan Tandon, economist at Capital Economics, expects a 100 bps hike, saying the central bank cannot afford the luxury of keeping the policy rate on hold given the need to tame record high inflation and support the currency through monetary tightening.

“Rate hikes may also prove to be a signal to potential creditors about the authorities’ commitment towards resolving external imbalances,” he said.

The policy decision will follow the annual budget that will be presented to parliament on Friday. The government will hope to strike a balance between reforms to satisfy the International Monetary Fund (IMF) and measures to win over voters in an imminent election due by November.

The cash-strapped country, with reserves to barely meet a month’s worth of imports, is undertaking steps to secure a $1.1 billion loan, part of a $6.5 billion IMF bailout package.

These measures include raising taxes and removing blanket subsidies and artificial curbs on the exchange rate.

Comments

Comments are closed.

SBP to leave 21pc policy rate unchanged amid high inflation

Profits, dividends: July-August repatriation rises 74pc YoY

Open-market: rupee gains further ground against US dollar

Supreme Court adjourns hearing on pleas against Faizabad sit-in verdict till Nov 1

IRIS system’s capacity enhanced: Up to 0.6m taxpayers to file tax returns on a daily basis

Pakistani vocational school helps Afghan women refugees build businesses

Faysal Bank to set up ‘wholly-owned’ Exchange Company

PTI says Farrukh Habib ‘picked up’ from Gwadar

KE tariff hiked up to Rs4.45

Ban on import of smuggled items through ATT imminent

Shamshad seeks greater role of provinces towards meeting targets