The Pakistan Stock Exchange (PSX) kicked off the new business week positively, posting significant gains in early trading on Monday, as reported by national media.
According to a report by Pak Observer, the KSE-100 index surged by 2,132.95 points, reaching an all-time high of 111,646.09 points, up from the previous close of 109,513.14 points. Investor confidence was bolstered by a recent policy rate cut by the State Bank of Pakistan (SBP) and encouraging economic indicators, including a drop in inflation.
Last week, the central bank reduced the key policy rate by 200 basis points to 13 percent, effective from December 17, 2024. This decision by the Monetary Policy Committee (MPC) followed a review of key indicators, including a decline in headline inflation to 4.9 percent year-on-year in November 2024.
The decline in inflation was largely driven by lower food inflation and the fading impact of gas tariff hikes from November 2023. However, the MPC noted that core inflation, which stands at 9.7 percent, remains persistent, and inflation expectations among consumers and businesses continue to fluctuate.
The Committee emphasized that inflation could remain volatile in the short term before stabilizing within the target range. Meanwhile, growth prospects have slightly improved, as seen in recent high-frequency economic indicators. Overall, the MPC concluded that its gradual rate cuts are effectively controlling inflationary and external pressures while supporting sustainable economic growth.
Follow Us on Google News
