Author Topic: Interest Rate Forecast  (Read 343729 times)

1 Member and 2 Guests are viewing this topic.

Offline Farzooq

  • Administrator
  • Senior Member
  • *****
  • Posts: 22119
  • Thanks Received: 196
    • View Profile
Re: Interest Rate Forecast
« Reply #1699 on: November 23, 2019, 11:37:53 AM »
State Bank keeps its Policy Rate unchanged at 13.25%

The State Bank of Pakistan (SBP) in its Monetary Policy Committee (MPC) announcement today held its Policy Rate unchanged at 13.25%. This was in line with market expectations.

Market had broadly anticipated no change in interest rates. In a Bloomberg Poll of 48 respondents, 42 had opined no change, 2 were for 25 basis point reduction while 4 respondents expected 50 basis points cut.

We had opined a cut of 50 basis points on the basis of lowering of inflation during FY20. As per our estimates, Inflation is expected to start declining from 4QFY20 while softness is expected by the start of the next fiscal year.

The above inflation expectation has been echoed by the SBP, which believes that inflationary pressures are expected to recede in the second half FY20. However, the SBP has shown concern on the recent rise in inflation where the inflation for October was reported at 11% (up 1.8% on monthly basis), which was higher than expectations. SBP specifically showed concerns on recent surge of food inflation as this may in turn lead to wage inflation.

The SBP believes that the current monetary policy stance is appropriate as real interest rates in Pakistan remain in line with other countries including Indonesia, China and Egypt.

The SBP has noted the improvement in the country’s external account where the current account deficit (CAD) for Jul-Oct’19 came down to US$1.5bn (down 74% over last year). Further, the SBP noted that the gross reserves have started to increase while forward liabilities have started to decrease, which is an encouraging sign.

On the real activity in the economy, SBP stated that development expenditure releases have been increasing in the recent few months, which will help contribute to economic growth in coming months.

We maintain the view that interest rates have peaked and expect the SBP Policy Rate to come down to 12% during the next calendar year 2020.
TOP PICKS
Engro efert ogdc ppl pso dgkc luck hubc ubl hbl atrl nrl nml efoods aicl hcar searl

Pakinvestorsguide

Re: Interest Rate Forecast
« Reply #1699 on: November 23, 2019, 11:37:53 AM »

Offline Farzooq

  • Administrator
  • Senior Member
  • *****
  • Posts: 22119
  • Thanks Received: 196
    • View Profile
Re: Interest Rate Forecast
« Reply #1700 on: November 29, 2019, 01:28:47 PM »
Inflation - November 29, 2019

CPI Likely to Settle at 12.51% YoY in Nov’19

Rise in Perishable Food Prices Pushing Inflation Upwards

We expect Nov’19 inflation to settle at 12.51% YoY compared to 5.7% in Nov’18 and 11.04% in Oct’19, respectively. The YoY uptick in CPI is expected on the back of i) increase in prices of perishable products including tomatoes (contributed 75bps in inflation), onions and fresh vegetables along with other food related products like Pulses (Moong, mash, masoor and gram), ii) increase in prices of petroleum products, and iii) increase in prices of Cooked Daal / Beef by 0.8% MoM. Whereas stable prices of Chicken, Eggs and Fresh Milk kept the inflation subdued. This will take the 5MFY20 average inflation to 10.8% compared to 6.1% in 5MFY19. On a yearly basis, increase in inflation will likely be led by Food (+21.7%YoY), Alcoholic Beverages & Tobacco (+18.3% YoY), Transport (+15.3% YoY), and Miscellaneous (+12.2% YoY).

Monthly Inflation to settle at 1.20%

On a MoM basis, CPI reading is expected to increase by 1.2% attributable to surge in Food Index (+2.8% MoM), Restaurant and Hotels index (+0.8% MoM) and Transport Index (+0.6% MoM). As per Sensitive Price Index (SPI) data published by the Pakistan Bureau of Statistics (PBS), average prices of Tomatoes, Onions, Fresh vegetables, Pulse Moong, Pulse Mash, and Potatoes are expected to register a jump of 156%, 11%, 10%, 9%, 9% and 7% MoM, respectively. On the other hand, meagre decline in prices of essential food items like Chicken (-8%), and Fresh Fruits (-6% MoM) are expected to keep the food index contained.

Outlook

We expect inflation to remain in double digit in FY20 and peak out in Jan’20 at 12.5%. We expect inflation to remain elevated in upcoming months on account of regular adjustment in electricity price (fuel cost adjustment and base tariff hike) and continuous surge in prices of perishable food items. However, significant decline in prices of perishable food items and transport index might affect our inflation forecast. On monetary policy front, the MPC has taken into account the recent surge in inflationary readings post hike in perishable food items and believes the current policy rate is suitable to help keep inflation contained. We expect decline in interest rate to initiate from Mar’20 onwards.
TOP PICKS
Engro efert ogdc ppl pso dgkc luck hubc ubl hbl atrl nrl nml efoods aicl hcar searl

Offline aatradekhi

  • Senior Member
  • *****
  • Posts: 2350
  • Thanks Received: 0
    • View Profile
Re: Interest Rate Forecast
« Reply #1701 on: December 04, 2019, 02:38:59 PM »
CPI FOR NOVEMBER

Offline merc007

  • Active Member
  • ***
  • Posts: 838
  • Thanks Received: 5
    • View Profile
Re: Interest Rate Forecast
« Reply #1702 on: January 12, 2020, 10:49:47 AM »
A quick question when is the next policy review. (interest rate ) is it on 22nd January now as after 2 months
lets see how long it takes to be wealthy

Offline Investonly

  • Junior Member
  • **
  • Posts: 407
  • Thanks Received: 0
    • View Profile
Re: Interest Rate Forecast
« Reply #1703 on: January 12, 2020, 09:26:09 PM »
A quick question when is the next policy review. (interest rate ) is it on 22nd January now as after 2 months
Date is random each time.  Announcement date shouldn't be necessarily exactly after two months.
Lagta hy apne bhi Hum news k kuch screenshot dekh liye hein. That is baseless

Offline merc007

  • Active Member
  • ***
  • Posts: 838
  • Thanks Received: 5
    • View Profile
Re: Interest Rate Forecast
« Reply #1704 on: January 13, 2020, 10:55:34 AM »
Thanks for the update .
lets see how long it takes to be wealthy

Offline naumaan

  • Dubai and Islamabad Property Consultant
  • Active Member
  • ***
  • Posts: 735
  • Thanks Received: 4
  • www.ppmela.com
    • View Profile
Re: Interest Rate Forecast
« Reply #1705 on: January 14, 2020, 12:40:27 AM »
either 15th or 17th, In Shaa Allah

Offline optimistic

  • Senior Member
  • *****
  • Posts: 5110
  • Thanks Received: 0
    • View Profile
Re: Interest Rate Forecast
« Reply #1706 on: January 14, 2020, 07:34:36 AM »
either 15th or 17th, In Shaa Allah

MPS on 17th
TOP Scripts as below: Updated (28th Sept, 2019)
1. Feroz, 2. Hinoon, 3. Akzo, 4. Mughal, 5. DCR, 6. APL, 7. CPPL, 8. Engro Corp, 9. Hubco, 10. Searl. 11. TRIPF. 12. Sanofi Aventis.

I am not perfect. Please do your own research my comments / or views may not prove accurate, nor i advise anyone to act upon on my recommendations, nor i accept any responsibility on me. Your money, your gain / or loss, before investing into any script better you gain sufficient knowledge of business and calculate risk accordingly as per your risk appetite.

Offline mustafaji3000

  • New Member
  • *
  • Posts: 26
  • Thanks Received: 0
    • View Profile
Re: Interest Rate Forecast
« Reply #1707 on: January 14, 2020, 09:37:56 AM »
Fitch forecast inflation to average 11.3pc in FY20 against 6.8pc in FY19 and expected the SBP to keep the policy rate at the current peak of 13.25pc in the coming months, before modest cuts towards the end of FY20 as inflationary pressures begin to fade.

Offline Investonly

  • Junior Member
  • **
  • Posts: 407
  • Thanks Received: 0
    • View Profile
Re: Interest Rate Forecast
« Reply #1708 on: January 15, 2020, 10:46:11 PM »
What are expectations

Offline Allah.Ditta

  • New Member
  • *
  • Posts: 10
  • Thanks Received: 0
    • View Profile
Re: Interest Rate Forecast
« Reply #1709 on: January 15, 2020, 10:51:57 PM »
What are expectations

most probably ... unchanged

Offline momo

  • Senior Member
  • *****
  • Posts: 1367
  • Thanks Received: 9
    • View Profile
Re: Interest Rate Forecast
« Reply #1710 on: January 16, 2020, 04:48:45 PM »
What are expectations

most probably ... unchanged

Agreed. Will be unchanged. They want to keep inflation under check and also keep the foreign money, invested in government bonds, in the country for now. Will probably start easing in the second half of CY20.

Offline Investonly

  • Junior Member
  • **
  • Posts: 407
  • Thanks Received: 0
    • View Profile
Re: Interest Rate Forecast
« Reply #1711 on: January 16, 2020, 10:30:22 PM »
What are expectations

most probably ... unchanged

Agreed. Will be unchanged. They want to keep inflation under check and also keep the foreign money, invested in government bonds, in the country for now. Will probably start easing in the second half of CY20.

Cement me tezi ki koi khas wje ni pta chali

Offline onlybulls

  • Senior Member
  • *****
  • Posts: 1277
  • Thanks Received: 0
    • View Profile
Re: Interest Rate Forecast
« Reply #1712 on: January 16, 2020, 10:58:42 PM »
Mostly indicators positive side agr gaye April 2020 ke badh. Like interest and inflation. Aur wo speed koi rapid ni hogi. Jis tra in 10 months interest rate up hua. Ustra agle 3 year bi down to 7% around ni hoga.
Anyway Farzooq bhai like persons can put light accurately.
I just shared an Idea only.

Offline Knife

  • Junior Member
  • **
  • Posts: 101
  • Thanks Received: 0
    • View Profile
Re: Interest Rate Forecast
« Reply #1713 on: January 17, 2020, 06:22:23 PM »
I think the inflation will come down to 5-6 % or even lower by December 2020. The reason for higher inflation right now is higher food inflation which will result in massive supply side growth next year if every thing remains normal and also depreciation effect would be discounted. So their will be a decrease in interest rate but yes not at the pace they grew but inflation will remain on the lower side next year if nothing unusual happens. the dollar will devalue a bit this year but not that much and the dollar reserves will keep on rising giving positive outlook to the economy.
Cement demand will keep on rising due to higher remittances from expatriates so the demand will not go down and once the interest rates will start coming down you will see a massive demand from government also which will increase its demand further.

Offline rashid.Maria

  • Senior Member
  • *****
  • Posts: 1302
  • Thanks Received: 0
    • View Profile
Re: Interest Rate Forecast
« Reply #1714 on: January 17, 2020, 08:32:03 PM »
I think the inflation will come down to 5-6 % or even lower by December 2020. The reason for higher inflation right now is higher food inflation which will result in massive supply side growth next year if every thing remains normal and also depreciation effect would be discounted. So their will be a decrease in interest rate but yes not at the pace they grew but inflation will remain on the lower side next year if nothing unusual happens. the dollar will devalue a bit this year but not that much and the dollar reserves will keep on rising giving positive outlook to the economy.
Cement demand will keep on rising due to higher remittances from expatriates so the demand will not go down and once the interest rates will start coming down you will see a massive demand from government also which will increase its demand further.

Inflation  next year bi itni rahni hai. Aor reserves jo increase hoa hai wo hot money  hai jo interest rate ki waja sai a rahi hai.

Offline newser

  • New Member
  • *
  • Posts: 83
  • Thanks Received: 0
    • View Profile
Re: Interest Rate Forecast
« Reply #1715 on: Today at 09:31:12 AM »
https://www.dawn.com/news/1528985/foreign-investment-in-treasury-bills-reaches-record-22bn

Ye high interest rate rakh ke baahar say mazeed paisy jamma kar rahay hai...high interest rate, high usd, high cost of energy, corruption and hurdles to doing business - export competitiveness to waisay hi kill ho rahi hai...hazir players ko subsidy margins day rahay hai aur upcoming aur innovative players ko push out...no thank you, this is seemingly short term planning with no possible practical growth prospects - 2020 me agar ham shrink hongay to 2021 me konsa bara teer maar lenge, meri zindagi kay mazeed 5 saal against the current lag jaanay walay hai aur future to dhun me dhakka dikhai day raha hai... GOD HELP US!

Offline Aahaf

  • Senior Member
  • *****
  • Posts: 3799
  • Thanks Received: 0
    • View Profile
Re: Interest Rate Forecast
« Reply #1716 on: Today at 02:36:05 PM »
I think the inflation will come down to 5-6 % or even lower by December 2020. The reason for higher inflation right now is higher food inflation which will result in massive supply side growth next year if every thing remains normal and also depreciation effect would be discounted. So their will be a decrease in interest rate but yes not at the pace they grew but inflation will remain on the lower side next year if nothing unusual happens. the dollar will devalue a bit this year but not that much and the dollar reserves will keep on rising giving positive outlook to the economy.
Cement demand will keep on rising due to higher remittances from expatriates so the demand will not go down and once the interest rates will start coming down you will see a massive demand from government also which will increase its demand further.

Inflation  next year bi itni rahni hai. Aor reserves jo increase hoa hai wo hot money  hai jo interest rate ki waja sai a rahi hai.
inflation in tomato prices reduced 200% MOM loa maal :tongue: