Author Topic: Interest Rate Forecast  (Read 350244 times)

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Offline Farzooq

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Re: Interest Rate Forecast
« Reply #1639 on: September 12, 2019, 10:32:01 AM »
*PAKISTAN MONETARY POLICY TO BE ANNOUNCED ON SEPT. 16

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Re: Interest Rate Forecast
« Reply #1639 on: September 12, 2019, 10:32:01 AM »

Offline ajeebkhan

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Re: Interest Rate Forecast
« Reply #1640 on: September 12, 2019, 11:28:43 AM »
*PAKISTAN MONETARY POLICY TO BE ANNOUNCED ON SEPT. 16
Market expections are 25 bps cut..

Offline Farzooq

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Re: Interest Rate Forecast
« Reply #1641 on: September 13, 2019, 12:07:16 PM »
Monetary Policy Statement: Reduction of 25bps Expected

Easing Cycle to Initiate

SBP is scheduled to announce its monetary policy on September 16, 2019. We expect the central bank to lower its policy rate by 25bps to 13.00%. Primary reason for this decline in policy rate, in our view, is the decline in FY20 expected inflation from 10.7% to 9.6% due to rebasing of CPI from 2007-08 to 2015-16. To recall, previous rate hike of 100bps in Jul’19 was on account of higher inflationary forecast and one time adjustment in utility prices. Despite adjustment in utility prices, change in weights of gas and electricity in CPI methodology resulted in lower inflation of previous and current year.

After rebasing, average inflation for 1QFY20 is expected to settle at 9.92%, while a policy rate of 13.25% would result into a real interest rate of 333bps. Data for the past 48 months exhibits that average real interest rates have remained approx. 2.1%. Therefore, we believe rate cut of 25bps in upcoming monetary policy would still keep real interest rates at 3.08%.

Money Market Incorporated Decline in Interest Rates

§  The yield curve has shifted downwards towards the longer end of the curve, whereby the yields for 10-yr PIB have declined by 136bps since Jul’19.

§  The T-bill auction held on Wednesday (September 11th, 2019) was also extraordinary as 87% of the total participation was made in one year T-bills, showing that market participants wanted to lock-in their rates for one year as they foresee a decline in interest rates during the period. The result of the auction exhibited that the cutoff for 1-yr T-bill was lower by 32bps, while the remaining didn’t change much. In the secondary market trading, the yield for 1-yr T-bill has declined to 13.52%, which is a further decline of 41bps since the cutoff. One plausible explanation for this move is that the government only realized 24% of bids for the 12 month paper, which meant the remaining bidders came to secondary market to purchase the paper.

§  Decline in cutoff for T-bills as well as movement in secondary market for T-bills and PIBs are pointing towards a cut in discount rate in the upcoming monetary policy

25bps Cut in Policy Rate is Expected

On the external front, Current Account Deficit witnessed a substantial decline of 73% YoY to USD 579 million in Jul’19. Meanwhile, CAD has reduced down to a sustainable level of around 2.5% of GDP due to a massive decline in imports as the incumbent government continues to undertake several corrective measures. On the other hand, exchange rate is now stabilizing between PKR156/USD to PKR158/USD.

We believe domestic demand has already been compressed as witnessed in the declining statistics of imports (-22% for 2MFY20) and sales of consumer durables (Autos -42% YoY, Electrical Appliances etc). We expect the SBP to reduce the policy rate by 25bps citing lower than expected inflation and reduction in interest rates globally. We also expect a further 100 bps rate cut during FY20 which is expected in Mar’20 and May’20 by 50bps each.
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Offline Farzooq

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Re: Interest Rate Forecast
« Reply #1642 on: September 13, 2019, 12:10:11 PM »
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Offline salmankaramat

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Re: Interest Rate Forecast
« Reply #1643 on: September 13, 2019, 01:14:00 PM »
Status quo, no change in discount rate expected.

Offline Investonly

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Re: Interest Rate Forecast
« Reply #1644 on: September 13, 2019, 05:12:15 PM »
Should not expect cut this time.

Should be in November

Offline Farooq Qadir

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Re: Interest Rate Forecast
« Reply #1645 on: October 03, 2019, 12:44:23 PM »

AKD Daily

Pakistan Economy: Inflation - Sep’19 reading kills early easing prospects

•         Headline inflation for Sep’19 jumped to a multi-year high of 11.38%YoY vs. 10.50%YoY in the preceding month and 5.40%YoY in Sep’18. The acceleration was primarily driven by the Food group (+2.12%MoM), reflecting the rising prices both in perishable (+4.95%MoM) and non-perishable items (+1.58%MoM).

•         The monthly inflation rate, however, dropped to 0.76%MoM vs. average monthly rate of 1.8%MoM in 2MFY20, as the country moves past the economic adjustment phase. The authorities’ decision to cut fuel prices for Sep’19 (-3.36%MoM on avg.) also played its part, partially offsetting the impact of rising food prices.

•         Market-wise, Urban inflation accelerated to 11.56%YoY (vs. 10.64%YoY in Aug’19 and 5.6%YoY in Sep’18) driven by rising food, clothing and appliances prices , while Rural Inflation jumped to 11.09%YoY (vs. 10.27%YoY in Aug’19 and 5.1% in Sep’18), with the heavy-weight food group being the single largest contributor (~99%).

•         Higher than expected inflation reading may dent the expectations of an early rate cut, where elevated inflationary pressures and challenges on the fiscal front will likely lead to Status Quo on the monetary policy front.
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Offline Irfan

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Re: Interest Rate Forecast
« Reply #1646 on: November 06, 2019, 01:51:01 PM »
https://www.dawn.com/news/1515203/national-savings-profit-rates-slashed

Profit rate on Defence Saving Certificate was slashed by 2.33 percentage points to 10.68pc while rate of  Behbood Saving Certificates and Pensioners’ Benefit Account have been slashed by 2.28pps to 12.48pc.

Rate on regular certificates has been cut by 2.04pps to 10.92pc, Special Saving Certificate by 1.70pps to 11pc while profit on Saving Accounts cut by 2.05pc to 8.20pc

The rates have been revised down due to the declining secondary market yields on long-term Pakistan Investment Bonds and Treasury-bills.


isnt it early?

Offline aatradekhi

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Re: Interest Rate Forecast
« Reply #1647 on: November 06, 2019, 02:09:30 PM »
https://www.dawn.com/news/1515203/national-savings-profit-rates-slashed

Profit rate on Defence Saving Certificate was slashed by 2.33 percentage points to 10.68pc while rate of  Behbood Saving Certificates and Pensioners’ Benefit Account have been slashed by 2.28pps to 12.48pc.

Rate on regular certificates has been cut by 2.04pps to 10.92pc, Special Saving Certificate by 1.70pps to 11pc while profit on Saving Accounts cut by 2.05pc to 8.20pc

The rates have been revised down due to the declining secondary market yields on long-term Pakistan Investment Bonds and Treasury-bills.


isnt it early?

Too much reduction as compare to upcoming MP outcome might/to be around 50bps maximum

Offline Mohammad Zafar Siddiqui

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Re: Interest Rate Forecast
« Reply #1648 on: November 06, 2019, 02:10:20 PM »
ATRL KA KIA KARNA CHAYE IS RATE PER SALE OR PURCHASE.

Offline Alpha

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Re: Interest Rate Forecast
« Reply #1649 on: November 06, 2019, 10:49:28 PM »
ATRL KA KIA KARNA CHAYE IS RATE PER SALE OR PURCHASE.

Sell it on every rate until a miracle happens with it

Offline psx Learner

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Re: Interest Rate Forecast
« Reply #1650 on: November 06, 2019, 11:00:31 PM »
ATRL KA KIA KARNA CHAYE IS RATE PER SALE OR PURCHASE.
atul can test 104-102 put stoploss @97.5 and hold
Sell it on every rate until a miracle happens with it

Offline psx Learner

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Re: Interest Rate Forecast
« Reply #1651 on: November 06, 2019, 11:02:14 PM »
ATRL KA KIA KARNA CHAYE IS RATE PER SALE OR PURCHASE.

Sell it on every rate until a miracle happens with it

hold with stoploss 97.5   it can test 104-102

Offline optimistic

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Re: Interest Rate Forecast
« Reply #1652 on: November 06, 2019, 11:09:36 PM »
ATRL KA KIA KARNA CHAYE IS RATE PER SALE OR PURCHASE.

Sell it on every rate until a miracle happens with it

hold with stoploss 97.5   it can test 104-102

It can test 110-120 satta bhot strong ho gya ha Refineries mei look at results and share price performance. 
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Offline Farooq Qadir

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Re: Interest Rate Forecast
« Reply #1653 on: November 07, 2019, 01:19:50 PM »

AKD Daily

Pakistan Economy: Weak FX Buffer Stands in the Way of Easing

•   Pakistan’s national CPI inflation decelerated to 11.04%YoY in Oct’19 vs. 11.38%YoY in Sep’19, reflecting a high base effect. On a monthly basis, national CPI index jumped 1.8% vs. monthly rate of 0.77% in Sep’19, mainly driven by the housing and utility rates adjustment (housing & utility index: +3.65%MoM) and higher perishable food prices (+13.76%MoM).

•   After a relatively soft Oct’19 reading, we project the headline national inflation to once again climb to 11.70%YoY in Nov’19 due to momentum effect and partial reversal of high base effect. Over the medium, it will remain elevated till Feb’20 in the range of 11.50-11.80%YoY, aided both by soft base and monthly utility price adjustments.

•   From Mar’20 onwards, inflation is expected to taper off, closing FY20 at ~10.08%YoY, aided by favorable base effects and moderation in food prices, as they come off from recent peak.

•   Upcoming issuance of Eurobond (expected by Dec’19) and IMF Mission review (currently underway) are two important checkpoints.  Although the reported concession on revenue target will provide some breathing space, the full year target still remains tough, given the authorities still need to show a massive 38%YoY growth (vs. 16%YoY recorded in 4MFY20).

•   While better than expected improvement in macro-imbalances is encouraging, reserves buffer still remains critically weak (import cover of mere 2.3months) particularly considering new exchange rate regime. The MPC scheduled to meet later this month will continue to adopt a wait and see approach until it gets comfortable with respect to reserve and fiscal position. 


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Offline aatradekhi

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Re: Interest Rate Forecast
« Reply #1654 on: November 07, 2019, 02:50:05 PM »

Offline stuka

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Re: Interest Rate Forecast
« Reply #1655 on: November 11, 2019, 10:13:26 AM »
Govt is attracting hot money into the country. So a status quo is expected to be maintained instead of signaling reversal to the potential investors......

the market is in an overbought situation
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Offline stuka

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Re: Interest Rate Forecast
« Reply #1656 on: November 13, 2019, 10:02:56 AM »
https://www.brecorder.com/2019/11/12/543596/pakistan-economy-undergoing-slowdown-governor-sbp-admits/

is it unofficial monetary policy statement????????? will review interest rates when inflation starts cooling down........ mean a status quo in saturdays announcement????
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Offline safdarkbw

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Re: Interest Rate Forecast
« Reply #1657 on: November 13, 2019, 08:00:25 PM »
Monetary Policy ki Announce Kub Hai.??? SENIORS PLEASE INFORM

Offline winner11

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Re: Interest Rate Forecast
« Reply #1658 on: November 16, 2019, 12:11:27 PM »
MPS Expectations:

Just till last week I was of the view that SBP may pause to attract Foreign T-bill flows. I believe the flows will not benchmark yields it will target reforms and continue to flow.

Hence I believe SBP will go for rare cut.

Source - Muzzammil Aslam