Business

Monetary policy: SBP likely to leave rate on hold today

Published

1 year 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

PSX surpasses the historical 71,500-point threshold.

Published

3 days ago

Farwa

Investors celebrated as the PSX finally crossed the historic 71,500 point threshold, signalling a critical turning point in the state of the economy in the country.

The KSE-100 index jumped more than 740 points, soaring to a record high of 71,650 points, demonstrating the tenacity and optimism that pervaded the Pakistani financial market.

This outstanding accomplishment indicates strong growth possibilities for the foreseeable future and demonstrates investors’ faith in the nation’s economic prospects.

The Pakistan Stock Exchange (PSX)’s KSE-100 index saw a minor decline of 60.92 points on Friday, or 0.09 percent, and ended the day at 70,483.66 points.

In the foreign exchange market, the US dollar lost value in relation to the Pakistani rupee at the same time.

Currency dealers claim that on the first day of the workweek, the value of the US dollar dropped by 11 paisas to Rs278.20 in the interbank market, significantly strengthening the rupee.

Business

Outsourcing: Investors from Turkey stop by the airport in Karachi

Published

3 days ago

Farwa

Turkish investors, who are interested in outsourcing Pakistan’s airport industry, sent a high-level team to Karachi Airport.

The domestic arrival and departure lounge at Karachi airport was visited by the Turkish investment group, according to information. The investors were briefed about the workings of the Karachi airport by a delegation of the Civil Aviation Authority, headed by Secretary Aviation Saif Anjum.

An update on the volume of people and business leaving the airport was also provided to Turkish investors. It is anticipated that the delegation would tour the cargo terminal and CAA headquarters today.

The nation’s three main airports, Karachi, Lahore, and Islamabad, were formerly to be outsourced by the federal government.

Interest in outsourcing three of Pakistan’s airports has been expressed by local parties as well as investors from Germany, France, the Netherlands, Qatar, the United Arab Emirates, Malaysia, and Turkiye.

The timeframe for proposal submission for Islamabad International Airport’s outsourcing was extended by the Civil Aviation Authority (CAA) earlier on March 21.

The government’s top objective in the process of outsourcing international airports, according to Prime Minister (PM) Shehbaz Sharif, is openness.

First, he stated that Pakistan is willing to participate in a public-private partnership to outsource a portion of the airport’s commercial activities.

Business

The inaugural flight of Azerbaijan Airlines is between Baku and Karachi.

Published

6 days ago

Farwa

The national airline of Azerbaijan launched direct flights from Baku to Karachi today. There will be two weekly flights on this route, on Thursdays and Sundays.

The first flight will land in Karachi, and Azerbaijan’s ambassador, Khazar Farhadov, will be there to greet it.

This evening also marks the departure of the inaugural flight from Karachi to Baku, in addition to the arrival of the flight from Baku.

Azerbaijan Airlines said last month that it would be growing its network and flight operations in Pakistan.

Aviation insiders have verified that Azerbaijan Airlines is preparing to launch service to Karachi in the coming month of April.

In addition to its current services in Islamabad and Lahore, the airline plans to launch its Karachi route on April 18, with the inaugural flight anticipated to depart on that date.

Azerbaijan Airlines has been given permission to operate flights on the Karachi route, according to sources within the Civil Aviation Authority (CAA).

Following a bilateral agreement between the two nations, Azerbaijan Airlines has been given permission to extend its operations in Pakistan.