The majority of participants of a survey conducted by a brokerage house expect the policy rate to remain unchanged in the upcoming Monetary Policy Committee (MPC) of the central bank, to be held on October 30.
According to a survey conducted by Topline Securities, 70 percent of participants expect the policy rate to remain unchanged at 22 percent. 16% of participants expect the policy rate to down by 25-100bps and 11 percent of participants expect it to down by more than 100bps.
Just 3 percent expect the policy rate to increase by more than more than 100bps and no one expects it to increase by 25-100bps.
In the latest MPC meeting held on Sep 14, the State Bank of Pakistan (SBP) decided to keep the policy rate unchanged at 22 percent which came contrary to market expectations. At the time, the SBP governor stated that the decision was driven by the fact that real interest rates are expected to remain in positive territory in the future.
In response to the question where you see the policy rate in June 2024, 41 percent of the participants anticipate the policy rate to be in the range of 16-18 percent and another 41 percent expect it to be 18-20 percent. On the other hand, 8 percent of participants expect the policy rate to be in the range between 20- 22 percent, 5 percent of participants expect the policy rate at 14-16 percent, and another 5 percent of participants expect it to be below 14 percent.
In response to the question regarding the expected average inflation for FY24, 35 percent of the participants anticipate inflation to range between 20-22 percent, and 30 percent of participants expect inflation to fall between 22-24 percent. 16 percent of participants expect inflation to fall between 24- 26 percent. On the other hand, 16 percent of participants expect inflation to be below 20 percent and 3 percent of participants expect inflation above 26 percent.
Responding to our question on the PKR/USD parity outlook in the interbank market by June 2024, 32 percent of the participants anticipate the PKR/USD parity to range between Rs. 280-320, and another 32 percent expect it to be around Rs. 300-320. 14 percent of the participants anticipate it to be in the range of Rs. 320-340. On the other hand, 19 percent expect it to be below Rs. 280, while 3 percent expect it to be above Rs. 340.
The brokerage house said it also believes the SBP will keep the policy rate unchanged at 22 percent in the upcoming MPC meeting.
Source: Pro Pakistani