The Pakistan Stock Exchange (PSX) saw a rally in the early trading session after the State Bank of Pakistan (SBP) announced no change in pol...
The Pakistan Stock Exchange (PSX) saw a rally in the early trading session after the State Bank of Pakistan (SBP) announced no change in policy rates and the KSE-100 index gained 500 points. increased more than
The benchmark KSE-100 index, which was in a slump yesterday, rose 536 points or 1.25% to 43,363 points by 10:00 am.
Ali Malik, Chief Executive of First National Equities Limited, said that the decision of the State Bank's Monetary Policy Committee (MPC) to maintain the policy rate at 15 percent for the next 2 months is a positive 'surprise' for the Pakistan Stock Exchange. However, yesterday's announcement boosted investor confidence.
Also Read: SBI Policy Rate Hike Expected, Stock Exchanges Down 444 Points
He further said that it is expected that the market may start an upward journey from here, if the political stability in the country is maintained, the stock market may cross the 45-har points mark in the coming days.
Ali Malik added that the continuous increase in the volume of buying and selling of shares in PSX is an indication that investors are making new deals.
Raza Jaffrey, head of research at Intermarket Securities, noted that the MPC's decision to keep interest rates on hold is the first such decision since the monetary tightening initiated in September last year.
He further said that the political environment was hot but the situation is improving due to continuity in economic policies.
Read more: Central Bank announces to maintain interest rate at 15%
Announcement to maintain interest rate at 15%
It should be noted that yesterday the State Bank of Pakistan (SBP) had announced to maintain the interest rate at 15%.
The Monetary Policy Committee (MPC) has decided to maintain the policy rate at 15 percent as expected due to inflation, moderation in demand and improvement in external position, SBP said in a statement.
According to the statement, the policy rate has been increased by a total of 800 basis points since last September to cool down the overheating economy and control the current account deficit.
According to the monetary policy statement, the current situation of inflation is in line with the expectations, likewise due to the moderation in domestic demand and the beginning of some improvement in the external position, the MPC was of the opinion that it would be wise to take a pause at this stage.
Read more: State Bank hikes interest rate by 125 basis points to 15 percent
It was further informed that since the last session, headline inflation rose to 24.9% in July, along with core inflation, which was expected to rise as the necessary removal of energy subsidies, food prices There was an increase and a decrease in the exchange rate.
As the trade balance fell sharply, the rupee reversed its depreciating trend during August, and its value improved by nearly 10 percent.
Also Read: Inflation highest in 13 years, interest rate hike expected by 125 basis points, experts
The third important thing that has happened is that the Board will meet on August 29 on the ongoing review under the International Monetary Fund (IMF) program, and we expect to receive an installment of $1.2 billion, the statement said.
Similarly, Pakistan has successfully received an additional $4 billion from friendly countries, which will further increase its foreign exchange reserves.
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