{"id":14411,"date":"2023-02-28T13:02:05","date_gmt":"2023-02-28T13:02:05","guid":{"rendered":"https:\/\/dailyausaf.com\/en\/?p=14411"},"modified":"2023-02-28T13:02:05","modified_gmt":"2023-02-28T13:02:05","slug":"sbp-gears-up-to-revise-interest-rates-in-off-cycle-review-on-march-2","status":"publish","type":"post","link":"https:\/\/dailyausaf.com\/en\/business\/sbp-gears-up-to-revise-interest-rates-in-off-cycle-review-on-march-2\/","title":{"rendered":"SBP gears up to &#8216;revise&#8217; interest rates in off-cycle review on March 2"},"content":{"rendered":"<p>SBP gears up to &#8216;revise&#8217; interest rates in off-cycle review on March 2. The <a href=\"https:\/\/www.sbp.org.pk\/\">State Bank of Pakistan<\/a> (SBP) on Tuesday &#8220;preponed&#8221; its Monetary Policy Committee (MPC) meeting on March 2 \u2014 which was initially scheduled to meet for March 16 \u2014 in another attempt to increase the pace of efforts to secure the much-awaited International Monetary Fund&#8217;s (IMF) tranche.<\/p>\n<p>The SBP announced on its official Twitter handle that &#8220;the forthcoming meeting of the Monetary Policy Committee has been preponed and now it will be held on Thursday, March 02, 2023,&#8221; the central bank announced on its Twitter handle.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">The forthcoming meeting of the Monetary Policy Committee has been preponed and now it will be held on Thursday, March 02, 2023. <a href=\"https:\/\/t.co\/555JOhCFoe\">pic.twitter.com\/555JOhCFoe<\/a><\/p>\n<p>&mdash; SBP (@StateBank_Pak) <a href=\"https:\/\/twitter.com\/StateBank_Pak\/status\/1630438047429939200?ref_src=twsrc%5Etfw\">February 28, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>The SBP&#8217;s chief spokesperson Abid Qamar had said earlier that, following the meeting last month, no MPC meeting had been held to date.<\/p>\n<p>The MPC was established under the SBP&#8217;s Amendment Act, which is empowered to take a decision keeping in view the macroeconomic fundamentals.<\/p>\n<p>The market expects the SBP to raise benchmark interest rates as the rise in treasury yields in the last auction hinted towards market weighing-in concerns on the economic front with the investors continuing to take note of rising inflation around the world as well as in Pakistan, Arif Habib Limited stated in a commentary released earlier.<\/p>\n<p>Moreover, sources had told a private news channel last week that the coalition government had agreed to hike the interest rate from the existing level of 17% to 19% under one of the major conditions put forth by the Fund to revive the loan programme.<\/p>\n<p>However, analysts believed that the SBP needed to bring forward the MPC meeting date as the ministry of finance cannot afford failure in the next T-bill auction.<\/p>\n<p>It is to be highlighted that the Fund and the central bank had held a round of discussions about the possibility of further tightening of monetary policy and building up foreign exchange reserves by the end of June 2023.<\/p>\n<p>The IMF had also asked the SBP for hiking the policy rate by 300 to 400 basis points in order to move towards the interest rate from a negative to a positive trajectory.<\/p>\n<p>The cash-strapped country is undertaking key measures to secure IMF funding, including raising taxes, removing blanket subsidies, and artificial curbs on the exchange rate. While the government expects a deal with IMF soon, media reports say that the agency expects the policy rate to be increased.<\/p>\n<p>Off-cycle rate reviews are not uncommon in Pakistan, though.<\/p>\n<p>Adnan Sheikh, Assistant Vice President of Research at Pak Kuwait Investment Company, said that a rate hike is imminent.<\/p>\n<p>Fahad Rauf, Head of Research at Ismail Iqbal Securities, said that the IMF has given a target to at least keep rates higher than core inflation.<\/p>\n<p>&#8220;Pakistan has two core inflation readings i.e., urban (15.4% for Jan-23) and rural (19.4%) and no national core number is released. If the SBP tries to bring rates above rural core inflation, it requires a rate hike of 200-300 bps,&#8221; he said.<\/p>\n<p>Mohammad Ayub Khuhro, a fund manager at a local fund, said that recent economic data on government finances suggest that it was running low on its cash balances held with the central bank.<\/p>\n<p>&#8220;This is why the government went ahead with picking up their desired targets despite a signalling effect it would send to the markets,&#8221; Khuhro said.<\/p>\n<p>&#8220;The government has effectively bypassed the central bank in order to fulfil IMF conditions by accepting a higher cut-off,&#8221; he added.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>SBP gears up to &#8216;revise&#8217; interest rates in off-cycle review on March 2. The State Bank of Pakistan (SBP) on Tuesday &#8220;preponed&#8221; its Monetary Policy Committee (MPC) meeting on March 2 \u2014 which was initially scheduled to meet for March 16 \u2014 in another attempt to increase the pace of efforts to secure the much-awaited [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":14412,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,9],"tags":[7965,443,7130,7103,572,138],"class_list":["post-14411","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-latest-news","tag-abid-qamar","tag-dollar","tag-monetary-policy-committee","tag-mpc","tag-sbp","tag-pakistan"],"_links":{"self":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/14411","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/comments?post=14411"}],"version-history":[{"count":0,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/14411\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media\/14412"}],"wp:attachment":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media?parent=14411"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/categories?post=14411"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/tags?post=14411"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}