Business

Monetary policy: SBP likely to leave rate on hold today

Published

2 years ago

Farwa

SBP to issue advance calendar of MPC meetings for first half of 2023.
Small section of market participants did not rule out a hike or reduction.
Central bank increased rate by 800 basis points in 11 months.

KARACHI: The State Bank of Pakistan (SBP) is scheduled to announce its key policy rate for the next six weeks today and a majority of pundits have developed a consensus that the central bank will leave the rate unchanged at 15% in order to wait for the stabilisation of the economy.

However, a small section of market participants did not rule out a hike of 50-100 basis points or a reduction of 25-50 basis points.

More importantly, Finance Minister Ishaq Dar, who is following his old recipe of running a controlled economy, will like to see an easy monetary policy. The policy rate is a tool for the central bank to create a balance between inflation and economic growth.

The central bank increased the rate by a cumulative 800 basis points in 11 months (September 2021 to July 2022) to 15%.

The Monetary Policy Committee (MPC) maintained the rate in its previous monetary policy unveiled on October 10, 2022.

Most of the pundits aren’t expecting any rate increase because the Ministry of Finance has not indicated anything in the recent T-bill auctions.

The OMO injection is growing and it’s around Rs6 trillion. And SBP has issued recent OMOs at prevailing rates. This implies that SBP might not be thinking of any increase in the rate. The secondary market yields imply the same.

In addition, another positive development since the last MPC meeting has been the decline in international prices of major commodities such as WTI, coal, brent, steel, wheat, and Arab Light. This bodes well for our external account position, hence providing much-needed relief to our trade numbers.

To recall, in the last monetary policy statement too, the MPC stated that the existing rate prudently reflected a balance between maintaining growth post floods and managing inflation.

Moreover, as mentioned in the last statement, SBP is closely monitoring the inflation trajectory. On the inflationary front, the headline inflation continues to remain in the double-digit since November 2021 mainly on the back of an uptick in food and energy prices.

In the month of October, headline inflation clocked in at 26.6% year-on-year. However, on a month-on-month basis, inflation increased by 4.71% mainly due to fuel cost adjustment adjustments and food price hikes.

The central bank is also expected to issue the advance calendar of MPC meetings for the first half of the calendar year 2023 after today’s meeting.

Business

An investigation was “launched” into PTA’s inability to get Rs. 78 billion back from Telcos

Published

24 hours ago

Farwa

The PTA has reportedly been instructed to reply to NAB by July 29. According to the enquiry, the national exchequer has suffered losses as a result of the delay in collecting dues.

The PTA has been asked to provide NAB with information about any pertinent records, court proceedings, and overdue bills. The NAB Karachi has summoned the PTA officials to appear with all pertinent documentation.

All of the principle sum has to be paid by the LDI firms, according to sources. But due to judicial stay orders, the collection of dues has been impeded.

These sources further state that a steering group has been established by the Ministry of IT to supervise the issue of dues recovery.

In a previous event, the tariffs levied on importing cell phones from outside were clarified by the Pakistan Telecommunication Authority (PTA).

Contrary to what some internet reports claim, PTA clarified in response to recent news regarding the tariffs on mobile phone imports that there hasn’t been a formal decision to remove these levies in Pakistan.

the PTA.Pakistanis living abroad will be the only ones free from these levies, according to the PTA. A SIM card can be inserted and the phone restarted to temporarily register a device for non-PTA mobile subscribers.

Business

Weekly inflation in Pakistan increased by 0.17 percent.

Published

24 hours ago

Farwa

The SPI for the week under review in the aforementioned group was reported at 321.95 points, as opposed to 321.40 points during the previous week, according to the PBS statistics.

The SPI for the combined consumption group saw a 20.09 percent increase in the week under review compared to the same week the previous year.

The weekly SPI includes 51 necessary items for every spending group and 17 urban areas, with a base year of 2015–16 = 100.

The SPI for the lowest consumption category, which is up to Rs 17,732, grew by 0.08 percent from 311.97 points to 312.22 points this past week.

0.18 percent,The index of consumption for the lowest consumption groups, which are Rs 17,732-22,888, Rs 22,889-29,517, Rs 29,518-44,175 and above Rs 44,175; increased by 0.13 percent, 0.15 percent, 0.18 and 0.19 percent, respectively.

Nineteen (37.25%) of the fifty-one commodities had price increases over the week, eight (15.69%) had price decreases, and twenty-four (47.06%) had unchanged pricing.

On a weekly basis, the following commodities saw significant price decreases: tomatoes (9.19%), onions (2.14%), LPG (1.04%), bananas (0.53%), wheat flour (0.35%), potatoes (0.17%), pulse masoor (0.16%), and bread (0.05%).

Chicken (4.80%), garlic (2.01%), pulse gramme (1.87%), eggs (1.71%), beef (0.93%), gur (0.89%), pulse moong (0.84%), fresh milk (0.45%), firewood (0.23%), and cigarettes (0.12%) were among the items whose average prices increased significantly week over week.

The commodities that saw a year-over-year decline were: wheat flour (31.75%); cooking oil (13.44%); vegetable ghee 2.5 kg (10.42%); vegetable ghee 1 kg (9.85%); mustard oil (8.33%); eggs (5.82%); rice basmati broken (4.15%); and tea package (2.52%).

Gas prices for Q1 (570.00%), onions (96.01%), pulse gramme (40.39%), powered milk (39.11%), garlic (34.61%), pulse moong (29.77%), men’s sandals (25.01%), beef (23.52%), salt powder (23.28%), pulse mash (22.50%), and energy saver (17.96%) were among the commodities whose average prices increased year over year.

Business

The price of gold has drastically dropped in Pakistan.

Published

2 days ago

Farwa

As per the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the cost of 24-karat gold per tola decreased by Rs 2,300, standing at Rs 250,500.

A kilogramme of 24-karat gold costing Rs1,972 less at the local market, making it worth Rs2114,763. Ten grammes of 22-karat gold had a price decrease to Rs196,866 as well.

After losing a significant $43 during the day, the rate per ounce of gold on the international market also decreased. It currently stands at $2,370.

On Thursday, the price of 24-karat silver also experienced a decline, falling by Rs60 to settle at Rs2,860 petal.