Current Final

Tag: SBP

  • SBP expected to cut policy rate on Monday

    SBP expected to cut policy rate on Monday

    The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) is scheduled to convene on Monday, June 10, to deliberate on the nation’s monetary policy. This crucial meeting will be closely watched by market participants and economic analysts.

    Following the MPC meeting, the SBP is expected to release its monetary policy statement via a press release later the same day.

    In the most recent MPC meeting held on April 29, the committee opted to maintain the interest rates at a historic high of 22 per cent, marking the seventh consecutive meeting where rates remained unchanged.

    Speculation is rife among market analysts that the SBP may reduce its policy rate by 100 basis points (bps). If this anticipated reduction materialises, it would be the first rate cut in nearly four years, signalling a potential shift in the SBP’s approach after an extended period of stringent measures aimed at combating rampant inflation.

    The MPC’s decision is set to precede the announcement of the federal budget for 2024-25, adding further significance to Monday’s meeting.

    A potential rate cut could indicate a strategic move to stimulate economic growth and provide relief to businesses and consumers alike in the run-up to the new fiscal year.

  • Pakistan’s forex reserves decline by $63.3 million to $9.09 billion

    Pakistan’s forex reserves decline by $63.3 million to $9.09 billion

    The State Bank of Pakistan (SBP) has reported a marginal decline in the nation’s foreign exchange reserves, indicating a decrease of $63.3 million or 0.69 per cent week over week (WoW) to $9.09 billion, according to data released on Thursday.

    The central bank attributed this downturn primarily to debt repayments. In a statement issued by the SBP, it was highlighted that during the week ending May 24, 2024, SBP reserves experienced a $63 million decrease to reach $9.09 billion, primarily due to external debt repayments.

    Similarly, Pakistan’s overall reserves witnessed a decrease of $270 million or 1.85 per cent WoW, amounting to $14.32 billion. Furthermore, commercial banks saw a decline in reserves by $206.7 million or 3.81 per cent WoW, totaling $5.22 billion.

    Despite these fluctuations, the current fiscal year has seen a remarkable increase in SBP-held reserves, amounting to $4.63 billion or 103.6 per cent.

    This surge follows Pakistan’s attainment of the International Monetary Fund’s (IMF) Stand-By Arrangement (SBA) of approximately $3 billion by the end of June last year.

    This arrangement not only bolstered the nation’s reserves but also facilitated access to additional multilateral and bilateral funding.

    Furthermore, the ongoing calendar year has witnessed a notable increase of $872.5 million or 10.61 per cent in reserves, reflecting continued efforts to stabilise and strengthen Pakistan’s economic position.

  • SBP holds key policy rate at 22% for seventh consecutive time

    SBP holds key policy rate at 22% for seventh consecutive time

    The State Bank of Pakistan (SBP) announced on Monday that it is maintaining its key policy rate at 22 per cent, marking the seventh consecutive meeting with no changes to the rate.

    The Monetary Policy Committee (MPC), in its meeting, discussed ongoing macroeconomic stabilisation measures.

    The committee noted that these measures have contributed to noticeable improvements in both inflation and the external economic position. This comes against a backdrop of moderate economic recovery.

    The MPC’s statement following the meeting acknowledged that, while inflation has begun to improve, it remains high.

    The committee also mentioned that global commodity prices seem to have stabilised, indicating resilience in global economic growth.

    However, the committee highlighted a number of uncertainties. It pointed out that recent geopolitical events have created additional uncertainty in the global economic outlook.

    Additionally, the upcoming budgetary measures might affect short-term inflation trends.

    Given these factors, the MPC concluded that the current monetary policy stance should be maintained to achieve its inflation target of 5 to 7 per cent by September 2025.

  • SBP likely to hold interest rate at record 22% amid IMF negotiations

    SBP likely to hold interest rate at record 22% amid IMF negotiations

    The State Bank of Pakistan (SBP) is expected to maintain its record 22 per cent interest rate at its upcoming policy meeting on Monday.

    This marks the seventh consecutive meeting with rates held steady, as Pakistan navigates discussions with the International Monetary Fund (IMF) for a new long-term funding arrangement.

    The central bank’s decision comes ahead of an IMF Executive Board meeting to discuss a $1.1 billion disbursement, the final tranche of a $3 billion Stand-By Arrangement.

    A Reuters poll of 14 analysts predicts the SBP will hold its rate, though there are mixed forecasts within the group.

    Four analysts anticipate a 100-basis-point (bps) cut, while two expect a 50-bps cut. Eight believe the SBP will cut rates before securing a new IMF programme.

    The central bank’s next Monetary Policy Committee (MPC) meeting is scheduled for June 10, potentially before Pakistan’s expected new IMF agreement.

    Finance Minister Muhammad Aurangzeb mentioned that discussions with the IMF for a longer-term programme will begin next month, aiming for a staff-level agreement by early July.

    Pakistan’s last rate hike was in June 2023 to combat inflation and meet IMF requirements. Consumer Price Index (CPI) data for March showed a 20.7 per cent increase from the previous year, with a peak of 38 per cent in May.

    However, inflation is slowing, partly due to the “base effect,” with April’s CPI expected to be around 17.5 per cent, according to businessman Arif Habib.

    The SBP’s monetary policy decisions will consider various factors, including inflation trends and geopolitical tensions affecting fuel prices.

    Tahir Abbas, head of research at Arif Habib Limited, suggests rates won’t be cut until a new IMF programme is in place.

    Looking ahead, Mustafa Pasha, Chief Investment Officer at Lakson Investments, predicts a small rate reduction in the current quarter, with significant cuts in the September quarter.

    According to Business Recorder, this is driven by the need to roll over approximately 6.7 trillion rupees in domestic treasury bills in late 2024 and expected stabilization in inflation and foreign exchange inflows.

    He forecasts that the interest rate could settle around 17 per cent by December.

  • Pakistan’s forex reserves fall by $73.5 million in one week

    Pakistan’s forex reserves fall by $73.5 million in one week

    The State Bank of Pakistan (SBP) reported a significant decline in its foreign exchange reserves for the week ending April 19, 2024, attributing the drop to external debt repayments.

    The central bank’s reserves fell by $73.5 million, a 0.91 per cent week-on-week reduction, bringing the total to $7.98 billion.

    This decrease reflects Pakistan’s ongoing struggles to maintain a stable foreign exchange reserve position amid mounting economic pressures.

    The SBP issued a statement explaining the decline, citing debt repayments as the primary reason for the dip. “During the week ended on April 19, 2024, SBP’s reserves decreased by $74 million to $7.98 billion due to external debt repayments,” the statement read.

    Concurrently, the total reserves of Pakistan, which include those held by commercial banks, also fell. The country’s total reserves dropped by $93.2 million, a 0.7 per cent week-on-week decrease, to $13.28 billion.

    Commercial banks’ reserves diminished by $19.7 million, or 0.37 per cent week-on-week, bringing their total to $5.3 billion.

    Last week, the SBP reported a slight increase in its reserves, up by $14.4 million despite a $1 billion Eurobond repayment. However, this week’s decline indicates continued pressure on the country’s foreign exchange reserves.

    In a recent development, the International Monetary Fund’s (IMF) executive board is set to meet on April 29 to discuss the approval of a $1.1 billion funding tranche for Pakistan.

    This funding represents the second and final installment of a $3 billion standby arrangement with the IMF, which was agreed upon last summer to avert a sovereign default.

    The current arrangement with the IMF is due to expire at the end of this month, prompting Pakistan to seek a new long-term and larger loan from the IMF.

    Finance Minister Muhammad Aurangzeb expressed optimism about the country’s foreign exchange reserves, stating that he expects the reserves held by the SBP to rise to around $9–10 billion by the end of the current fiscal year.

    Despite the recent decline, the total liquid foreign reserves have increased by $4.12 billion, or 44.98 per cent, since the beginning of the fiscal year.

    Additionally, the current calendar year has seen an increase of $0.61 billion, or 4.79 per cent.

    The fluctuations in Pakistan’s foreign exchange reserves underscore the country’s ongoing economic challenges and the critical importance of securing international funding to maintain financial stability.

  • SBP’s foreign exchange reserves rise by $18.5 million

    SBP’s foreign exchange reserves rise by $18.5 million

    The State Bank of Pakistan (SBP) saw an increase in its foreign exchange reserves, rising by $18.5 million or 0.23 per cent week over week (WoW), reaching $8.04 billion by the week ending March 29, 2024, according to the latest data released by the central bank on Thursday.

    However, the country’s overall reserves took a dip, decreasing by $48.7 million, or 0.36 per cent of WoW, and settling at $13.38 billion. 

    This decline is attributed to a drop in reserves held by commercial banks, which fell by $67.2 million, or 1.24 per cent of WoW, reaching $5.34 billion.

    It’s important to note that in the current fiscal year, total liquid foreign reserves have increased by $4.22 billion, or 46.06 per cent. 

    Additionally, the ongoing calendar year has seen an increase of $0.71 billion, or 5.57 per cent.

  • SBP maintains policy rate at 22% for sixth consecutive time

    SBP maintains policy rate at 22% for sixth consecutive time

    The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) has opted to maintain the key policy rate at 22 per cent, marking its sixth consecutive decision to uphold the status quo.

    In its statement released on Monday, the MPC affirmed its decision, stating, “At its meeting today, the MPC decided to keep the policy rate unchanged at 22 per cent.”

    While acknowledging a visible decline in inflation as anticipated in the latter half of Fiscal Year 2024 (H2-FY24), the MPC underscored the persistently high level of inflation and the associated risks, despite a notable deceleration in February. This cautious stance is deemed necessary to steer inflation towards the target range of 5–7 per cent by September 2025.

    Against a backdrop of uncertain inflation projections, major central banks worldwide, including those in advanced and emerging economies, have remained conservative in their monetary policy approaches, as highlighted in the MPC statement.

    Emphasising the importance of sustained targeted fiscal consolidation and timely realisation of planned external inflows, the MPC reiterated that its assessment hinges on these factors.

    Furthermore, the latest economic indicators indicate a moderate upturn in economic activity, primarily driven by a rebound in agricultural output. The external current account balance has outperformed expectations, bolstering foreign exchange reserves despite subdued financial inflows. However, inflation expectations among businesses have steadily risen since December, with consumer expectations inching up in March. Additionally, while global commodity prices have generally remained stable, escalating oil prices, attributed partly to ongoing tensions in the Red Sea, present a notable exception.

    Given the uncertainties surrounding the inflation outlook, compounded by potential upward pressure from administered price adjustments or fiscal measures, the MPC deems it prudent to maintain the current monetary policy stance for the time being.

  • SBP gears up for monetary policy meeting amid rate cut speculations

    SBP gears up for monetary policy meeting amid rate cut speculations

    The State Bank of Pakistan (SBP) has scheduled a meeting of its Monetary Policy Committee (MPC) for Monday, March 18, 2024, to deliberate on the nation’s monetary policy, as announced by the central bank on Friday.

    The SBP intends to release the Monetary Policy Statement on the same day, providing insights into its decision-making process.

    Anticipation looms as a prominent brokerage house foresees a noteworthy chance of the SBP reducing the key policy rate by 100 basis points (bps).

    Currently, the key policy rate stands at a historic high of 22 per cent.

    Arif Habib Limited (AHL) outlined in its recent report the likelihood of the SBP initiating a 100-bps cut in the upcoming policy, potentially marking the commencement of an interest rate reversal cycle.

    Despite Pakistan witnessing a decrease in headline inflation to 23.1 per cent year-on-year in February, as reported by the Pakistan Bureau of Statistics (PBS), down from 28.3 per cent in January, there are calls for cautious action.

  • SBP sees surge of over $17 million in forex reserves

    SBP sees surge of over $17 million in forex reserves

    The latest data released by the State Bank of Pakistan (SBP) revealed a notable rise in the country’s foreign exchange reserves. During the week ending March 8, 2024, SBP’s reserves increased by $17.2 million, marking a 0.22 per cent growth, reaching a total of $7.91 billion.

    Additionally, Pakistan’s overall reserves experienced a surge, ascending by $131.3 million, or 1.01 per cent, week-on-week (WoW), to a sum of $13.15 billion. This increase was further complemented by a rise in reserves held by commercial banks, which climbed by $114.1 million, or 2.23 per cent, to reach $5.24 billion.

    In a significant development, the second review of the stand-by arrangement (SBA) with the International Monetary Fund (IMF) is slated to take place from March 14 to 18, 2024. This review holds particular importance as it marks the final assessment under the SBA. Upon reaching a staff-level agreement, the final tranche of $1.1 billion will be disbursed, subject to approval by the Executive Board of the IMF.

    It is noteworthy that in the current fiscal year, Pakistan has witnessed a substantial increase in its total liquid foreign reserves, amounting to $3.99 billion, or 43.57 per cent. Similarly, the ongoing calendar year has seen a rise of $0.48 billion, or 3.77 per cent.

  • IMF mission to arrive tomorrow for final review discussions on Pakistan’s SBA

    IMF mission to arrive tomorrow for final review discussions on Pakistan’s SBA

    The International Monetary Fund (IMF) mission is poised to commence vital economic review discussions from March 14 to 18, 2024, marking the conclusive evaluation of Pakistan’s Standby Arrangement (SBA).

    Sources within the Finance Ministry have confirmed that the IMF mission is scheduled to touch down in Pakistan tomorrow night, kickstarting a series of pivotal discussions set to unfold over the next four days.

    During this intensive period, the IMF mission is slated to engage in comprehensive dialogue with Pakistan’s economic team. Key participants include representatives from the Finance Ministry, Energy Ministry, Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), Planning Commission, and the Petroleum Division.

    Insiders suggest that the IMF mission will delve into discussions covering a spectrum of economic facets. Talks are expected to encompass various critical sectors, including finance, energy, taxation, and central banking.

    Furthermore, in parallel with these discussions, preliminary conversations are anticipated to unfold regarding the potential initiation of a new loan programme with the IMF mission. This prospect adds an extra layer of significance to the ongoing economic deliberations as Pakistan navigates its financial landscape in the pursuit of sustainable economic growth.

    Stay tuned for comprehensive coverage as the IMF mission engages in the final review of Pakistan’s Standby Arrangement, paving the way for crucial decisions that could shape the nation’s economic trajectory in the coming months.