State Bank increases discount rate by 14 percent

Staff Report

LAHORE: The State Bank of Pakistan has announced Monetary Policy for next two months on Monday, increasing the discount rate by 14 percent.

During the press conference, the director of State Bank Hamza Ali Malik told media that discount rate has been increased to control inflation.

AGENCIES ADD: Pakistan’s central bank on Monday raised its benchmark interest rate by 0.5 percent to 14 percent, warning for the second time in two months that rising inflation was impacting the economy.

The State Bank of Pakistan attributed rising inflation to relentless government borrowing and the fallout from catastrophic flooding, and said inflation could remain in double digits into the next fiscal year, beginning July 2011.

“The economy’s ability to achieve sustainable recovery remains constrained owing to slow progress in the prevailing

Pakistani stocks end lower; rupee firms; o/n rates down

KARACHI: Pakistani stocks ended lower on Tuesday as local investors booked profits at higher levels ahead of the monetary policy announcement next week after the market ended on a 28-month high the previous day, dealers said.

The Karachi Stock Exchange’s benchmark 100-share index .KSE ended 0.31 percent, or 34.75 points, lower at 11,171.09.

Turnover rose to 154.97 million shares, compared with 113.32 million shares traded on Monday.

“After a huge run up yesterday the market took a breather and local institutions were sellers and the KSE-index is likely to stay under some pressure ahead of the monetary policy announcement,” said Asad Iqbal, chief investment officer at Faysal Asset Management Ltd.

The monetary policy is due to be announced on Nov. 29 for the next two months and dealers said investors cautiously await an expected 50 basis point hike in

PIA plane makes emergency landing at Karachi airport

KARACHI: Islamabad-bound PIA’s flight PK-308 is reported to have made an emergency landing at Karachi airport minutes after taking off.

According to sources, the plane made emergency landing at Karachi airport 15 minutes after taking off due to vibration in its engine number one.

KSE-100 Index slides 145 points

KARACHI: Pakistani stocks ended almost 1.4 percent, or 145 points lower on Monday following an unexpected increase in Pakistan”s key policy rate on Friday.

Pakistan”s central bank on Friday unexpectedly increased its key policy to 13 percent from 12.5 percent as inflation and fiscal weakness overshadowed improvement in the current account deficit and economic growth.

The KSE”s benchmark 100-share index, fell 1.38 percent, or 145.49 points, to end at 10,373.53 points on turnover of 79.51 million shares.

KSE-100 index sagged after the central bank increased its key policy rate, dealers said.

Dealers are looking to buy shares at lower levels in anticipation of expected profits for the quarter ending June30, she said.

Announcing the monetary policy for the next two months, the central bank”s acting governor Yaseen Anwar said a change in monetary policy was needed to reduce risks to economic stability.

MCB Bank is due to announce its results on Thursday and Pakistan Petroleum Ltd and Pakistan State Oil are scheduled to announce their results on Friday.

SBP hikes discount rate by 50 basis points

KARACHI: The central bank, tightening the monetary policy Friday, ratcheted up the discount rate by 50 basis points or 0.5 percent to 13 percent with effect from August 2.

Governor State Bank of Pakistan (SBP) Yasin Anwar made the announcement while briefing the media men on the monetary measures being taken for the next two months.

He said the rate of interest is being hiked from 12.5 percent to 13 percent with effect from August 2, 2010 while the rate of inflation will remain between 11 to 12 percent during the current fiscal.

Yasin Anwar said keeping fiscal deficit at 4 percent of GDP would be a challenge.

Inflation is likely to remain higher than the targeted figure in the fiscal 2010, he said, adding, in previous fiscal the rate of inflation was 2.7 percent above the target.

The State Bank of Pakistan had kept the rate unchanged at 12.5 percent on May 24.

The SBP Governor said the foreign investment has been witnessing decline over the past three years.

He pointed out the foreign assets of banks have increased to Rs152 in the past one year.

Iron prices soar by Rs.15, 000 per tonne

KARACHI: The iron prices have been reached to Rs.70, 000 per tonne after increment in prices of iron by Rs.15, 000 per tonne since January.

The chairman of Karachi Iron Steel Importer Merchant Association Shamoon Baqir told Geo News that local price of iron products depends upon the prices fixed by Pakistan Steel. Since January, the prices of billets has been increased in international market, therefore, Pakistan Steel has also increased the per tonne price of billets from Rs.40500 to Rs. 62,000.

Now the price of iron in retail market has been soared to Rs.70,000 per tonne from Rs.55,000 per tonne, he added.

Oil dips below 83 dollars in Asian trade

SINGAPORE: Oil dipped below 83 dollars in Asian trade Tuesday as investors took profits after a recent rally, analysts said.

Traders were also waiting for the results of a meeting Tuesday and Wednesday of the US Federal Reserve and the release of a weekly US report indicating energy demand in the world”s biggest economy.

New York”s main contract, light sweet crude for delivery in June, was down 52 cents to 83.68 dollars a barrel in afternoon trade.

Brent North Sea crude for June was down 25 cents to 86.58 dollars.

“It could be due to profit-taking because (New York) crude oil prices rallied quite a bit last Friday touching about 85.50,” said Serene Lim, a Singapore-based oil analyst with the ANZ bank.

“All eyes will be on the Fed statement… Depending on what comes out from the statement, that would impact interest rates and ultimately the US dollar and crude oil prices,” she said.

Because oil is traded in dollars, the strength or weakness of the US currency will affect oil prices and demand.

The US Federal Reserve board will discuss whether or not to raise its main interest rate from the zero-to-0.25 percent range where they have been since December 2008.

The historically low rates are seen as crucial to support the economic recovery — keeping borrowing costs low and fuelling spending.

Investors will be closely watching to see if the Fed repeats its long-standing promise to keep exceptionally low rates “for an extended period”.

Any shift in the language could be seen as heralding tighter monetary policy that could tame investors” appetite for risk.

The US economy, a key engine for global growth, is recovering from its worst downturn since the 1930s.

Lim said oil market players will also monitor the weekly US Department of Energy report due for release Wednesday. The report is an indicator of demand in the world”s biggest energy consuming nation.

SBP keeps policy rate unchanged at 12.5 pc

KARACHI: The State Bank of Pakistan kept on Saturday its key policy rate unchanged at 12.50 percent for April and May amid worry about persisting inflationary pressure and a widening fiscal deficit.

The SBP had also kept the rate unchanged on Jan. 30, when it announced policy for February and March, after cutting it by 50 basis points to 12.5 percent on Nov. 24.

“Given the uncertainties pertaining to the fiscal and quasi-fiscal sectors, present stance of monetary policy is striking a difficult balance between reducing inflation, ensuring financial stability, and supporting economic recovery,” the bank said in a statement.

“An upward adjustment in SBP”s policy rate, at this juncture, runs the risk of impeding the still nascent recovery, while a downward adjustment runs the risk of fuelling an already high inflation,” it said.

Analysts said the central bank”s decision was widely expected and prudent.

“The central bank would want further clarity on the direction of the paths of inflation and the external account before starting to ease monetary policy,” said Asif Qureshi, director at brokers Invisor Securities.

INFLATIONARY, FISCAL PRESSURES

The consumer price index (CPI), a key indicator of inflation, rose 13.04 percent in February from a year ago, and was up 0.39 percent over January.

The central bank, which forecast 2009/10 CPI inflation to average close to 12.0 percent, said “inflationary pressures have dampened but continue to persist”.

It also voiced concern over the weak fiscal position of an economy hit hard as by battles against Islamist militants in the northwest.

“Burdened by significant security related expenditures and shortfalls in revenues, keeping the fiscal deficit for FY10 within target would be challenging,” the bank said.

Interest rate likely go down in SBP new monetary policy

Full Story And Original Content. TrendPK.com KARACHI: At least 15 Brokerage Houses have expected decline in interest rate in upcoming monetary policy to be announced from State Bank of Pakistan (SBP) on Tuesday, November 24, Geo news reported on Saturday morning. The central bank, bringing down the interest rate, will likely waive a bit the forthcoming monetary policy,

Full Story And Original Content. TrendPK.com KARACHI: At least 15 Brokerage Houses have expected decline in interest rate in upcoming monetary policy to be announced from State Bank of Pakistan (SBP) on Tuesday, November 24, Geo news reported on Saturday morning.
The central bank, bringing down the interest rate, will likely waive a bit the forthcoming monetary policy, [...]

State Bank Of Pakistan Reduced By 100 Points

PAKISTAN, ISLAMABAD: State Bank of Pakistan has slashed the discount rate by 100 basis points.
At a press conference here Saturday, Governor SBP Syed Saleem Raza announced the monetary policy.
He announced that the SBP has decided to slash the discount rate by 100 basis points. “The SBP has cut the discount rate by one percentage points from the current 14 per cent,” Raza said.

The governor said GDP ratio reaches 2.1 pc. He said foreign exchange reserves improved sharply and stood at $9.1 billion.

The SBP has cut the discount rate by one percentage points from the current 14 per cent. It had cut the rate by one percentage point in April this year from 15 to 14 per cent.

The central bank also changed the interest rate mechanism to bring transparency in Repurchase Offered (repo) rate as well as reverse repo rate as recommended by the International Monetary Fund (IMF).

He said that IMF has appreciated Pakistan’s economic performance, adding that due to the inflation the export dropped by 5.9 pc.

“In recognition of the positive macroeconomic developments and to provide impetus for growth, while remaining entirely aware and not underestimating risks and challenges, the state bank has decided to cut the policy rate by 100 basis points,” Raza told a briefing.

The frequency of monetary policy announcements would be increased from four to six times a year and would be made in the last week of September, November, January, March, May and July, he said.

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